How an annuity works
Hand over capital, receive income for life. The interesting part is how anyone can promise that.
For educational purposes only. Simplified illustrations for self-led learning: explore at your own pace, in any order, and use the numbers you choose. Nothing here is based on your circumstances, so it is not financial, investment or tax advice, and not a recommendation.
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What's inside
- The insurer pools lives, so the group is predictable even though you are not
- People who die early fund the people who live long
- The rate on the day you buy is fixed for life and cannot be revisited
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