Definition - What does Annuity Due mean?
An annuity due is an annuity that is offered by many life insurance companies. Annuities due differ from many other types of annuities in that the payments on them are "due" at the beginning of each interval, as opposed to at the end. The payment interval could be once a month, once a quarter, once a year, etc. So the payments would be due at the beginning of the month, quarter, year, etc.
Insuranceopedia explains Annuity Due
Annuities due help to generate a fixed income for retirement. This is why many people chose to purchase them as a part of a life insurance policy. How they work is that the policyholder makes a payment at every interval for a certain amount of time. Then, once the person reaches retirement age, he or she can start receiving fixed payments from the annuity that has built up over time. Many annuity due options make annuity payments until the person passes away.
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