Legal Definitions - constituted annuity

A constituted annuity is a type of annuity that has a maximum duration of ten years and can be redeemed before the term's expiration under certain circumstances. It is a fixed sum of money payable periodically, usually monthly or annually, to a stated recipient. The payments stop upon the death of the designated beneficiary.

For example, if John purchases a constituted annuity that pays him $1,000 per month for ten years, he will receive $1,000 every month for ten years. If John dies before the ten-year term is up, the payments will stop, and his beneficiaries will not receive any further payments.

Constituted annuities are governed by Louisiana law and are different from other types of annuities, such as life annuities or variable annuities.