How Does Annuity Income Work?

  1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    In exchange for a sum of money the insurance company guarantees monthly payments on the annuitant for the balance of their life.  There are other settlements; however, this is the basic settlement.  The company knows that some will die before exhausting the money they deposited, while others will live longer.  This pooling of the common risk of living too long is the basis for an income annuity.
    Answered on August 29, 2014
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