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					    Chapter 3

Life Insurance Policies
    “Life Annuities”
            Annuities
Life Annuities: pays equal
 payments to the annuitant as long
 as he still alive or up to a specific
 age.
 Each  annuity payment   consists of:
 principal,  interest &    survivorship
 element.
                      Annuities
Classification of Life Annuities: 5 types:

a) Number of Annuitants (lives Covered):
1- A single-life annuity: covers one life.

2- A joint-life annuity: covers 2 lives & end at the death
  of 1st death( either annuitant).

3- A joint & last survivor annuity: provides payment to 2
  annuitants as long as either annuitant is alive & stop if
  both died.
             Annuities
b)Method of Premiums Payment:
1) Single premium.

2) Annual premium (2 types: fixed &
 flexible) but premium payment ends
 before annuity starts.
               Annuities
c)Beginning of Benefits:

1)Immediate Annuity: benefits begin in the
  1st period at the beginning of each period
  (due) or at the end of each period
  (ordinary).

2)Deferred      annuity:     benefits    begin
 (liquidation period) after more than 1 period
 (accumulation period) at the beginning
 (due) or at the end (ordinary).
                 Annuities
d) Disposition        of    Proceeds        (Promises
 Purchased):

1)Pure Annuity: paid only as long as the
 annuitant alive or up to a specific age.

2)Guaranteed Annuity:

2/1- Period-Certain Annuities: paid for
 minimum yrs or until the annuitant dies, which
 ever occurs last (2nd beneficiary receives payments
 for the rest of the certain period).
                 Annuities
2/2-Cash Refund Annuity: if annuitant
 dies before: annuities received = premiums paid,
 a 2nd beneficiary receives a lamp sum = premiums
 paid – annuities received

2/3-Installment Refund Annuity: if
 annuitant dies before: annuities received =
 premiums paid, a 2nd beneficiary receives the
 annuities until: premiums paid = annuities
 received.
             Annuities
e) Denomination of Values (How
 Benefits are Measured):
1-Fixed Currency Annuity: linked to a
  national or foreign currency.

2-Units Annuity (Variable): benefits linked
  to an investment fund.
               Annuities
Types of Annuities Contracts: 5 types:

1- Flexible Premium (with minimum)
  Deferred Annuity.

2- Single Premium Deferred Annuity.
              Annuities
3- Single Premium Immediate Annuity:

3/1 - Structured Settlement Annuity (between
 plaintiff & defendant) to pay for the injured.


3/2- Reverse Annuity Mortgage (between the
 homeowner & a bank or Insurance
 Company), insured gets an annuity (or a
 loan) & insurer get the house when he dies.
              Annuities
4- Variable Annuity (like life insurance)
depends on investment.

5- Equity Indexed Annuity (tied to an
index number).

				
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posted:2/27/2013
language:English
pages:11