Basic Classification of Annuities

• Firstly, how the annuity is purchased, they are divided into single premium annuities, by paying the lumpsum premium and by paying series of premium over a number of years.
• Secondly, how often the annuity is paid, it is typically on monthly basis but other options like fortnightly or quarterly may be possible.
• Third way, when the annuity payment is due to begin, either immediate or a deferred annuity
• Fourth classification, Length of the payout period or when the annuity payments would end.
• Finally, whether the annuity amount is fixed(Guaranteed) or variable.

Payment to Annuitants:

1. Annuities are paid to annuitants as long as they live during guarantee period & thereafter to nominee.
2. In joint life annuity, after death of annuitant, 50% of annuity is paid to surviving spouse during her life time.

• If the spouse predeceases the annuitant, the annuity ceases.