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.