Whole Life Annuity


DEFINITION of 'Whole Life Annuity'

A financial product sold by insurance companies that pays monthly, quarterly, semiannual or annual payments to a person for as long as he or she lives. 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 life annuity.

BREAKING DOWN 'Whole Life Annuity'

Annuities can be structured 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.

  1. Annuity

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

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

    The risk that the assumptions that actuaries implement into a ...
  4. Actuary

    A professional statistician working for an insurance company. ...
  5. Annuitant

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

    Indemnity is compensation for damages or loss. Indemnity in the ...
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