Annuity Buyer

Annuity BuyerTax Law Term “Annuity Buyer

An individual or entity such as a partnership, corporation, or a qualified plan which purchases a contract providing periodic payments to a beneficiary beginning at retirement or other fixed date and continuing for a term of years or for the life of the beneficiary.

In the United States, an annuity is a contractually executed, relatively low-risk investment fund, where the insured (usually, an individual) pays a life insurance company a lump-sum premium at the start of the contract. That money is to be paid back to the insured in fixed, incremental amounts, over some future period (predetermined by the insured). The insurer invests the premium; the resulting profit/return on investment funds the payments received by the insured and compensates the insurer. Conventional annuity contracts provide a predictable, guaranteed stream of future income (e.g., for retirement) until the death(s) of the beneficiaries(s) named in the contract, or, until a future termination date whichever occurs first. Wikipedia

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