Annuities

One dollar cash flows are valued using the present value annuity factor. The time value of money is used in this formula. It is the idea that a dollar obtained in the future is worth less than if the same amount is acquired in the present day. The money received today can either be invested […]

a rising annuity has equal cash flows that occur at equal intervals of time and grow at a consistent rate of growth. An growing annuity is another name for it. A growing annuity varies from a regular annuity and annuity in that its periodic cash flows grow at a fixed rate, whereas the annuity’s cash

It’s a contract with an insurance company that promises to pay the owner either a regular income, or a lump sum, at a certain time in the near future. It is common for investors to supplement their retirement income with deferred annuities. Instant annuities, on the other hand, begin making payments immediately. How does deferred

A fixed annuity guarantees the principal plus a minimum rate of interest from the insurance provider. For example, the value of money in a fixed annuity is guaranteed to grow over time. The annuity’s value and/or the benefits paid may be fixed at a specific cash amount or by an interest rate, or may rise

You’ll learn how to deal with a wide range of general annuity issues in this course. An annuity having payments that do not correspond to interest periods is known as a generic annuity. As soon as an analogous interest rate is set and compounded on a regular basis, you’ll find that dealing with general annuities

One of the simplest forms of annuity is the instant annuity. You only have to pay one time. For a certain period of time (as little as five years) or for the rest of your life, you’ll receive a steady stream of income from this investment. Within a year, withdrawals could start. Whats an immediate

a type of annuity in which the recipient must meet certain requirements before they can begin receiving payments. Most commonly, contingent annuities are used for life insurance and pensions that depend on a person being alive or dying. It is important to distinguish between contingent annuity and contingent annuitant, the latter of which is a

When you invest in a non-qualified annuity, you do so using pre-tax monies, meaning that you have already paid taxes on that money. Ordinary income is only taxed on the money you withdraw. What is the difference between a qualified and non-qualified annuity? One way to save for one’s future retirement is with a pre-tax

Annuities come in two varieties: An annuity is a type of insurance that pays you a fixed amount for a predetermined period of time. A life annuity is a contract that pays you a fixed sum of money for the rest of your life. Annuity certain (also known as a guaranteed or fixed annuity) Over

To meet a financial obligation, an annuity is a series of equal but spaced-out payments made by one party to the other over an extended period of time. When you’re dealing with annuities, an annuity payment is the dollar amount of each of the equal monthly installments. A six-month annuity with monthly payments is depicted