DEFINITION of 'Annuity Consideration'

The money that an individual pays to an insurance company in exchange for a financial instrument that provides a stream of payments for a given length of time. An annuity consideration may be made as a lump sum or a as a series of gradual payments.


Also referred to as a "premium".

BREAKING DOWN 'Annuity Consideration'

The payments provided by the annuity can be distributed monthly, quarterly, semiannually or annually. Payment amounts are based on a number of factors, including the amount of the annuity consideration, the age at which the annuitant begins receiving payments, the annuitant's life expectancy, the annuity's anticipated investment returns and whether the annuity is fixed or variable.

RELATED TERMS
  1. Whole Life Annuity Due

    A financial product sold by insurance companies that requires ...
  2. Deferred Payment Annuity

    An annuity where the payments received will start some time in ...
  3. Immediate Payment Annuity

    An annuity contract that is purchased with a single lump-sum ...
  4. Secondary Market Annuity

    A secondary market annuity (SMA) is a transaction in which the ...
  5. Annuity Due

    An annuity whose payment is to be made immediately, rather than ...
  6. Mortality And Expense Risk Charge

    A variable annuity fee included in certain annuity or insurance ...
Related Articles
  1. Retirement

    Explaining Types of Fixed Annuities

    Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income.
  2. Retirement

    How a Fixed Annuity Works After Retirement

    These popular investments can provide a steady stream of income during your retirement years. Here are the details.
  3. Retirement

    How a Variable Annuity Works After Retirement

    These investments can provide extra income after you retire. Here’s a guide to when and how you will receive the payout.
  4. Financial Advisor

    An Overview of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  5. Retirement

    Retirement Tips: Choose the Best Annuity Provider

    It pays to get the best advice if you are thinking of putting your money into one of these complicated investments.
  6. Investing

    Introduction To Annuities

    Everything you need to know about annuities.
  7. Financial Advisor

    Annuities: The Good, Bad and the Ugly

    Annuities suffer from a few perception problems. This primer that covers the good, the bad and the ugly of annuities.
  8. Retirement

    Immediate Annuities: Guaranteed Payout At A Price?

    This vehicle can have very low, or even negative, rates. Find out when it pays to invest.
  9. Retirement

    Why Are Annuities Important for Retirement?

    Understand how annuities work, and identify the benefits they provide for retirement, the most salient being a guaranteed income stream for life.
RELATED FAQS
  1. For what types of financial instruments would I want to calculate the present value ...

    Learn about the types of financial instruments the present value of an annuity calculation is most useful for, including ... Read Answer >>
Hot Definitions
  1. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  2. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  3. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  4. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  5. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  6. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
Trading Center