YOU ASK:
What is the definition of Net Annuity Cost?
WE ANSWER:
Net Annuity Cost refers to the amount that is equivalent to the present value of the income payments the annuity will provide, without the expense loading factored in. The expense loadings are the charges that the annuity issuer will levy on the annuity.
In short, this is what the annuity will cost at the present, without bringing into consideration other associated costs of the annuity such as administrative fees, investment fees or the premium for the insurance component of the annuity.
This is contrasted with the gross annuity cost, where all the expense loading are already part of the computation.
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