An annuity could be described as the opposite of a life assurance policy. It deals with survival rather than death benefits. Therefore the premature death of an annuitant is to the advantage of the life office. An annuity is defined as a periodical payment made by the life office to the annuitant in exchange for purchase money for the remainder of the lifetime of a named-life for a specified period irrespective of the duration of human life.
An annuity may be:
(i) With proportion or apportionable otherwise known as complete:-
This involving final proportionate payment calculated from the last payment to the date of death.
(ii) Without proportion or non-apportion able otherwise known as complete:-
Here annuity ceasing with the last periodical payment before death. The fundamental underlying principle of an annuity is that the buyer deposit certain amount of money with the life office and in return for the amount deposited the life office will make periodic payment for an agreed term to the annuitant
The principal types of annuity are:
i. ANNUITY CERTAIN: under an annuity certain, the life office in return for the purchase money by an annuitant undertakes to pay the annuitant a stipulated amount for a specified number of years
ii. DEFERRED ANNUITY: Under this form of an annuity, the annuitant pays a lump sum of money or a periodical payment of premium for a defined period.
iii. IMMEDIATE SINGLE ANNUITY: Under this form of an annuity, the annuitant secures a periodical payment throughout his life for the payment of purchase money.
iv. REVERSIONARY ANNUITY: Under this form annuity, the payment of purchase money will provide a periodical annuity payment for the lifetime of the annuitant consequent upon the death of specified life.
v. GUARANTEED ANNUITY: annuity can be protected for a certain number of years to ensure that the purchase price is not lost by an early death of the annuitant.
vi. TEMPORARY ANNUITY: this is payable for a certain number of years but ceasing on the death of the annuitant within that annuity could be described as the opposite of a life assurance policy. It deals with survival rather than death benefits. Therefore the premature death of an annuitant is to the advantage of the life office. An annuity is defined as a periodical payment made by the life office to the annuitant in exchange for purchase money for the remainder of the lifetime of a named-life for a specified period irrespective of the duration of human life.
An annuity may be:
(i) With proportion or apportionable otherwise known as complete:-
This involving final proportionate payment calculated from the last payment to the date of death.
(ii) Without proportion or non-apportion able otherwise known as complete:-
Here annuity ceasing with the last periodical payment before death. The fundamental underlying principle of an annuity is that the buyer deposit certain amount of money with the life office and in return for the amount deposited the life office will make periodic payment for an agreed term to the annuitant
The principal types of annuity are:
i. ANNUITY CERTAIN: under an annuity certain, the life office in return for the purchase money by an annuitant undertakes to pay the annuitant a stipulated amount for a specified number of years
ii. DEFERRED ANNUITY: Under this form of an annuity, the annuitant pays a lump sum of money or a periodical payment of premium for a defined period.
iii. IMMEDIATE SINGLE ANNUITY: Under this form of an annuity, the annuitant secures a periodical payment throughout his life for the payment
for more visit
https://www.topianotope.com