YOU ASK:

What is the definition of Pure Life Annuity?

WE ANSWER:

A Pure Life Annuity is a type of annuity that provides income payments to the annuitant as long as the annuitant lives. When the annuitant dies, the payments stop.

These payments can either be variable (tied to the performance of the market) or fixed (an amount guaranteed at the beginning of the policy).

With this kind of annuity, the annuitant may not fully receive the value of their original investment, if he dies "early". To prevent this, one can add a guaranteed annuity class for a period certain. With this, there is a guaranteed payment period where the insurance company has to pay for the income payments for the length of that period. If the annuitant continues to live after the period certain, he still stands to receive regular annuity payments.

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