An annuity buyer pays insurance companies money and in return receives money periodically over a long drawn out period of time. You can pay in lump sums or in payments.
Annuity Life is a contract of insurance between you the buyer and the seller. Variable Annuity Life is a company that covers retirement groups for schools, colleges and Health care.
An insurance annuity is a financial product in the form of an insurance product according to which a seller makes a series of future payments to a buyer in exchange for the immediate payment of a lump sum or a series of regular payments prior to the onset of annuity.
Annuity settlement buyers offer you a lump sum in exchange for the future payments you are due to receive. Most of the time these companies offer a 50% - 60% lump sum of the total payments.
The buyer of annuity structured settlements can pay less money by only buying settlements which are due to pay out over a longer period of time. Buying a settlement paid over 5 years isn't as profitable as the seller won't be willing to give up a sizable portion of their payment as they can still get it on a short term basis.
If the annuity is a non qualified tax deferred annuity (an annuity that taxes were paid on the money before they were placed into the annuity) you will pay taxes on any interest growth when it is removed from the annuity. If the annuity is a qualified annuity (no taxes were paid prior to placing the fund into the annuity) you will pay taxes on all withdrawals from the annuity.
A good starting point is the present value of the annuity, see related link for the formula.You need to know how many years the annuity is good for, and estimate an interest rate. This is generally the interest rate someone could get for the money elsewhere, for example on government bonds. (Since buying your annuity would tie up the money for years, the interest rate for long term papers is the most relevant.)If we assume a 20-year annuity, 5,000/year and 5% interest, the total payout from the annuity is 100,000 and the present value is ~62,000.You would probably need to sell it for less than present value to make it a better alternative than bonds. How much less depends on the buyer. As an example, if the buyer wants 2% extra interest for the trouble, you can plug in 7% in the formula and get a current value of 52,970.See the link for the formula and calculate for your own numbers.
"An annuity lead is a contract made between the buyer their insurance company, insuring them future payments in exchange for a fixed sum of money. It is basically one prospect in life insurance, to ensure a person can keep on getting a stable income, such as in retirement or as a result of a lawsuit."
An insurance annuity is when a seller makes payments to a buyer for payment of one large amount of money. You usually would go through a bank to get this process going.
difference between an annuity and a compound annuity?Read more: What_is_the_primary_difference_between_an_annuity_and_a_compound_annuity
ordinary annuity
The option to get annuity every month is called monthly annuity.
ordinary annuity we paid at the end of the period annuity due we paid at the begging of the period