What Is An Annuity?
The term annuity is most common in the pensions and insurance industry and refers to a payment term which has no final date.
Real life example :-
Prior to the recent changes in pension regulations, everybody was forced to buy an annuity at their chosen retirement date, or at the very latest, age 75.
Whatever was in their pension fund at retirement would be used to acquire an annuity, and the annuity would pay out a set amount (often increasing by inflation on an annual basis) on a monthly, quarterly, half yearly or annual basis.Â
The amount payable would be calculated using the persons age, sex, marital status and life expectancy forecasts issued by the government. Once agreed, the annuity payment would be paid until the death of the recipient.
You must be logged in to post a comment.