منتدى مربي الحيوانات الاليفة

الإنتساب · **الإنتساب** : 26/12/2010

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Life annuity

A

life annuity is a financial contract in the form of an insurance

product according to which a seller (issuer) — typically a financial

institution such as a life insurance company — makes a series of future

payments to a buyer (annuitant) in exchange for the immediate payment of

a lump sum (single-payment annuity) or a series of regular payments

(regular-payment annuity), prior to the onset of the annuity.

The

payment stream from the issuer to the annuitant has an unknown duration

based principally upon the date of death of the annuitant. At this

point the contract will terminate and the remainder of the fund

accumulated is forfeited unless there are other annuitants or

beneficiaries in the contract. Thus a life annuity is a form of

longevity insurance, where the uncertainty of an individual's lifespan

is transferred from the individual to the insurer, which reduces its own

uncertainty by pooling many clients. Annuities can be purchased to

provide an income during retirement, or originate from a structured

settlement of a personal injury lawsuit.

Phases of an annuity

There are two possible phases for an annuity:

The accumulation phase in which the customer deposits and accumulates money into an account, and ;

The distribution phase in which the insurance company makes income

payments until the death of the annuitants named in the contract.

It

is possible to structure an annuity contract so that it has only the

distribution phase; such a contract is called an immediate annuity.

Annuity

contracts with a deferral phase—deferred annuities—are essentially

two-phase annuities, but only having growth of capital by investment in

the accumulation phase (now the deferral phase), with no customer

deposits.

The phases of an annuity can be combined in the fusion

of a retirement savings and retirement payment plan: the annuitant makes

regular contributions to the annuity until a certain date and then

receives regular payments from it until death. Sometimes there is a life

insurance component added so that if the annuitant dies before annuity

payments begin, a beneficiary gets either a lump sum or annuity

payments.

Decision to defer or not

The

option to defer purchase of an annuity (choosing income drawdown

instead) has the benefit of investment flexibility, offset by the lower

annuity which one will be able to purchase later after having drawn down

the capital (mortality drag). Interest rates and inflation can affect

the decision to purchase, as they are reflected in the annuity rates,

and also affect secure investment potential by varying bond yields.

Inflation deteriorates the buying power of an annuity and can therefore

be a concern, however inflation-indexed plans have been marketed.[7]