Legal Definitions - life annuity

A life annuity is a type of annuity that provides a fixed sum of money payable periodically, usually monthly or annually, to a stated recipient. The payments continue until the death of the designated beneficiary. It is a right, often acquired under a life-insurance contract, to receive fixed payments periodically for a specified duration.

For example, if someone purchases a life annuity, they may receive a fixed monthly payment for the rest of their life. If they pass away, the payments stop, and the insurance company keeps the remaining funds.

There are different types of annuities, such as:

• Fixed annuity: An annuity that guarantees fixed payments, either for life or for a specified period.
• Variable annuity: An annuity that makes payments in varying amounts depending on the success of investment strategy.
• Deferred annuity: An annuity that begins making payments on a specified date if the annuitant is alive at that time.
• Immediate annuity: An annuity paid for with a single premium and that begins to pay benefits within the first payment interval.

These examples illustrate the different types of annuities that exist and how they work. A life annuity is just one type of annuity that provides a fixed income for life.