What are annuities?  
Annuities are contracts whereby the insurance company makes a series of payments at regular intervals from a fixed date until the death of the annuitant. In return for this benefit, the annuitant will have to pay a certain sum of money, known as the purchase price. The purchase price can be made in one lump sum or in a series of payments. If this mode of payment is chosen, the annuity payments can only commence after all the payments (of the purchase price) have been made.

Each annuity payment represents the repayment of a portion of the purchase price plus the interest earned. There are many kinds of annuities as will be described in the following answers.

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