Overview and Learning Objectives

An annuity is a means of providing a stream of income that is guaranteed for a period of time. In Chapter 8, this same concept was introduced as the “life income option”, which itself had many varieties. If you recall, the “life income option” guaranteed that the beneficiary could never outlive the benefit as was provided to them under the contract. In most cases this same payment plan would be termed an “annuity”. This chapter will outline an annuity’s purpose, structure, taxation, and how an annuity is used to compliment the needs of the client.