Whole Life Annuity

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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.

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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 >>
  6. What risks do I face when investing in the insurance sector?

    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>

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