5.0 Annuities
Learning Objectives
Upon completion of this chapter, you will be able to:
- Compare life insurance and annuities
- Distinguish between the accumulation period and the annuity period
- Identify the various annuity payout options
- Define the terms immediate annuity and deferred annuity
- List three types of annuities
Overview
The purpose of this chapter is to introduce the concept of annuities. Annuities may be used to accumulate funds for goals such as education or retirement planning. They can also be used to convert a lump sum of money into a stream of income payments that may continue for a specified period of time or for the lifetime of the recipient.