Annuity Consideration

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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.

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RELATED FAQS
  1. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  2. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  3. Can a variable annuity be rolled into an IRA?

    You can roll qualified variable annuities, such as other qualified retirement plan accounts, into a traditional IRA. Non-qualified ... Read Full Answer >>
  4. Are variable annuities subject to required minimum distribution (RMD)?

    Variable annuities are insurance contracts that provide tax-deferred growth of assets that can later generate a guaranteed ... Read Full Answer >>
  5. What level of reserve ratios is typical for an insurance company to protect against ...

    In the United States, and most developed nations, regulators impose required statutory capital reserve ratios on insurance ... Read Full Answer >>
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    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>

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