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.

BREAKING DOWN '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. Whole Life Annuity

    A financial product sold by insurance companies that pays monthly, ...
  2. Years Certain Annuity

    An insurance product that pays the holder a monthly income for ...
  3. Life Annuity

    An insurance product that features a predetermined periodic payout ...
  4. Annuity

    A financial product that pays out a fixed stream of payments ...
  5. Annuitization

    The process of converting an annuity investment into a series ...
  6. Contingent Annuitant

    Someone designated by an annuitant to receive the annuitant’s ...
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

    Buying Annuities in a Low Interest Rate World

    Learn if buying an annuity makes sense in a low interest rate environment. Also discover the different types of annuities and how interest rates affect them.
  3. Financial Advisor

    Advising FAs: Explaining Annuities to a Client

    Conceptually speaking, annuities can be thought of as a reverse form of life insurance.
  4. 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.
  5. Financial Advisor

    An Overview Of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  6. Financial Advisor

    Annuities and Baby Boomers: The Pros and Cons

    The pros and cons of annuities that Baby Boomers seeking retirement income need to know.
  7. Retirement

    Are Annuities Retirement-Only Investments?

    Learn more about why annuities are generally purchased and the way that they can positively and negatively affect an individual preparing for retirement.
  8. Retirement

    What Is the Best Age to Get an Annuity?

    Optimizing the benefits of an annuity means guaranteeing a stream of income you can't outlive.
  9. 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.
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. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center