What Is An Annuity Due

Examples of annuity due payments include rentals leases and insurance payments.

What is an annuity due. The first cash flow received immediately is what distinguishes an annuity due from an ordinary annuity. Annuity due is a term that you might come across when paying or receiving different kinds of payments. The higher the discount rate the lower the present value of the annuity.

Its important to know when a payment is an annuity due or an ordinary annuity. This is the total spent when all is said and done. Annuity Due or immediate is nothing but the sequence of periodic cash flows payments or receipts regularly occurring at the end of each period overtime.

Annuity due refers to a series of equal payments made at the same interval at the beginning of each period. A deferred annuity provides for an initial waiting period before the contract can be annuitized usually between one and five years and during that period the contracts cash value generally remains liquid and available albeit potentially subject to surrender charges write Robert Bloink and William H. Keep in mind that an annuity which is not an investment but rather an insurance product.

Just like the current value of an annuity due the future value supplies some insights. Definition of Annuity Due. And annuities can be partially or fully sold for cash or passed on to a beneficiary.

An annuity due is sometimes referred to as an immediate annuity. An annuity is an agreement that investors make with an insurance company. With an immediate annuity payments begin well immediately.

Whole Life Annuity Due. That distinguishes it from ordinary annuity which means the payment is due at the end of the period rather than at the beginning. The Investor customer gives the insurance company a sum of money either as a lump sum or in installments.