Temporary Life Annuity Due

What Does Temporary Life Annuity Due Mean?

A temporary life annuity due refers to a payment owed under a temporary life annuity. This type of annuity provides payments either until a specified time period ends or until the annuitant passes away, whichever occurs first. It sits in the broader family of retirement income products covered in our overview of what annuities are and how they work.

Insuranceopedia Explains Temporary Life Annuity Due

During the accumulation phase, the annuitant receives a temporary life annuity due for each pay period. Once the annuitization phase begins, the annuitant starts receiving regular payments from the annuity. Because payments stop at the earlier of two dates, this kind of annuity usually costs less than a straight life annuity, which is one reason buyers weigh it against other products sold by life insurance companies. These arrangements often come up when people shop for the best life insurance for seniors, since the capped payout period can match a defined retirement spending window. Payments continue until either the annuity expires or the annuitant passes away, at which point the payments cease.