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What Is Annuity Revenue?

Annuities are issued as an agreement between the insurance company and the investors. The investor in the annuity gets assured sums of money at periodic intervals in the future for the investment that he makes today. The investor can choose to make a one-time payment or extend it across several time periods.

  1. Features

    • There are several kinds of annuities available in the market. The investor is able to choose one that meets his specific requirements and needs. The investor and the insurance company upfront settle on the sum that the individual would invest, the time for which the annuity would be held, and the final payments.

    Types

    • Four types of annuities are most commonly bought by investors. These are fixed, variable, immediate and deferred annuities. Fixed annuities are ones in which the interest rates are fixed at the time of the issue. The rates of interest vary with variable annuities. The investor starts receiving payouts immediately in case he invests in an immediate annuity. Deferred annuities are ones where the investor receives the money invested and the interest accrued on it after the end of the stipulated period.

    Considerations

    • Annuity revenues are not totally risk free. The investor must carefully consider the volatility features of the annuity as well as the financial standing of the company before investing in it. Also, annuity revenues are taxable. The investors have to pay taxes on the payouts that they receive.

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