DEFINITION of 'Annuity Consideration'

The money that an individual pays to an insurance company in exchange for a financial instrument that provides a stream of payments for a given length of time. An annuity consideration may be made as a lump sum or a as a series of gradual payments.


Also referred to as a "premium".

BREAKING DOWN 'Annuity Consideration'

The payments provided by the annuity can be distributed monthly, quarterly, semiannually or annually. Payment amounts are based on a number of factors, including the amount of the annuity consideration, the age at which the annuitant begins receiving payments, the annuitant's life expectancy, the annuity's anticipated investment returns and whether the annuity is fixed or variable.

RELATED TERMS
  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Whole Life Annuity Due

    A financial product sold by insurance companies that requires ...
  3. Cash Refund Annuity

    An annuity contract that returns funds back to a beneficiary ...
  4. Delayed Annuity

    An annuity in which the first payment is paid at a later date ...
  5. Immediate Payment Annuity

    An annuity contract that is purchased with a single lump-sum ...
  6. Years Certain Annuity

    An insurance product that pays the holder a monthly income for ...
Related Articles
  1. 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.
  2. 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.
  3. Retirement

    Who Benefits From Retirement Annuities

    Annuities guarantee some degree of fixed income in retirement. But is the security worth the fees and less favorable tax treatment? How to decide.
  4. Investing

    The Many Benefits of Deferred Annuities

    Having a deferred annuity can ensure income in retirement above and beyond Social Security.
  5. Retirement

    Immediate Annuities: Guaranteed Payout At A Price?

    This vehicle can have very low, or even negative, rates. Find out when it pays to invest.
  6. Investing

    What Do You Need to Know About Annuities?

    There are varying views on annuities. Use this basic information to draw your own conclusions.
  7. 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.
  8. Investing

    Should You Buy an Annuity?

    There are both pros and cons of buying an annuity, so do your due diligence before investing in one.
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 >>
  2. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ... Read Answer >>
Hot Definitions
  1. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  2. Absolute Advantage

    The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost ...
  3. Nonce

    Nonce is a number added to a hashed block, that, when rehashed, meets the difficulty level restrictions.
  4. Coupon

    The annual interest rate paid on a bond, expressed as a percentage of the face value. It is also referred to as the "coupon ...
  5. Socially Responsible Investment - SRI

    Socially responsible investing looks for investments that are considered socially conscious because of the nature of the ...
  6. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
Trading Center