Whole Life Annuity Due

AAA

DEFINITION of 'Whole Life Annuity Due'

A financial product sold by insurance companies that requires annuity payments at the beginning of each monthly, quarterly or annual period, as opposed to at the end of the period. A whole life annuity due is a type of annuity that will provide the annuitant with payments during the distribution period for as long as he or she lives. After the annuitant passes on, the insurance company retains and funds remaining. Annuities are usually purchased by investors who want to secure some type of income stream during retirement. The accumulation period occurs as payments are being made by the buyer of the contract to the insurance company; the liquidation period occurs when the insurance company makes payments to the annuitant. Also called annuity due.

INVESTOPEDIA EXPLAINS 'Whole Life Annuity Due'

Annuities are financial products that are often purchased as part of a retirement plan to ensure income during the retirement years. Investors make payments into the annuity, and then, upon annuitzation, the annuitant will receive regular payments. Annuities can be structures to make payments for a fixed amount of time, commonly 20 years, or make payments for as long as the annuitant and his or her spouse is alive. Actuaries work with the insurance companies to apply mathematical and statistical models to assess risk when determining policies and rates.

RELATED TERMS
  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Annuity Ladder

    An investment strategy for retirees or near-retirees that entails ...
  3. Annuitization Method

    A type of annuity distribution structure that gives the annuitant ...
  4. Actuarial Risk

    The risk that the assumptions that actuaries implement into a ...
  5. Annuitant

    1. A person who receives the benefits of an annuity or pension. ...
  6. Actuary

    A professional statistician working for an insurance company. ...
Related Articles
  1. Investing Basics

    Calculating The Present And Future Value Of Annuities

    At some point in your life, you may have had to make a series of fixed payments over a period of time - such as rent or car payments - or have received a series of payments over a period of time, ...
  2. Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of Annuities

    These may look like good retirement vehicles, but beware of the fees buried in the fine print.
  3. Options & Futures

    Getting the Whole Story on Variable Annuities

    Variable annuities are another way to save money tax-deferred - but don't jump in blindly!
  4. Options & Futures

    Selecting The Payout On Your Annuity

    Make sure you understand your options for withdrawing your funds from this complex instrument.
  5. Retirement

    Annuities: How To Find The Right One For You

    Fixed, variable and indexed annuities offer different features. Find out which one fits your needs.
  6. Options & Futures

    Immediate Annuities: Guaranteed Payout At A Price?

    This vehicle can have very low, or even negative, rates. Find out when it pays to invest.
  7. Options & Futures

    20 Investments You Should Know

    To take advantage of all your investing options, you need to know what your choices are. Here we tell you about the diverse features and advantages of 20 different financial instruments.
  8. Economics

    Understanding Perpetuity

    Perpetuity means without end. In finance, a perpetuity is a flow of money that will be received on a regular basis without a specified ending date.
  9. Economics

    What is a Promissory Note?

    A written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.
  10. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center