# What does an annuity buyer do?

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.

### How can the buyer of annuity structured settlement pay less money?

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.

### Do you pay taxes on income earned in an annuity?

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.

### What is an annuity lead and when would I need one?

"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."

### If you sell a lottery annuity payment worth 100000 early what can you expect to get?

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…

### Differentiate between ordinary annuity and annuity due?

In an ordinary annuity, the annuity payments are fed into the investment at the END of the year. In an annuity due, the payments are made at the BEGINNING of the year. Therefore, with an annuity due, each annuity payment accumulates an extra year of interest. This means that the future value of an annuity due is always greater than the future value of an ordinary annuity. When computing present value, each payment in an…

### What is the difference between ordinary annuity and annuity due?

In an ordinary annuity, the payments are fed into the investment at the END of the year. In an annuity due, the payments are made at the BEGINNING of the year. Therefore, with an annuity due, each annuity payment accumulates an extra year of interest. This means that the future value of an annuity due is always greater than the future value of an ordinary annuity. When computing present value, each payment in an annuity…

### What are the best annuity rates?

Annuity rates are a tricky topic. Annuity rates have been fluctuating the past few years. Ever since the recession hit, the annuity rates have been rising and there is hope that will continue to. Based on the current market , an annuity rate that is between 8% and 15% is considered a good annuity rate.

### What is a deferred annuity?

An annuity that will not begin until some time period in the future. A deferred annuity is an annuity in which the taxes due on any taxable portion is deferred until you start to withdraw from the annuity. It is a way of compounding interest on the money you would normally paid taxes on if not in a ta deferred annuity. In a way it is like using the government's money to make you money.

### What companies sell Hybrid Annuity?

All reputable annuity suppliers will provide a hybrid annuity. Please talk to your financial adviser to select the best one for you. Some people may not realise that a hybrid annuity is nothing more than a name for a fixed index annuity with a guaranteed lifetime income rider. An investor buys units of a variable annuity and the balance of his portfolio is used to buy units of a fixed annuity.

### Are the contributions to an annuity tax deferred?

No. The money payments to a annuity plan when you purchase the annuity plan the amount that you pay for the plan is not tax deferred. The amount is after income tax funds. The earnings that go on inside of the annuity plan will be tax deferred until the time that you start taking distributions from the annuity plan.