Whole Life Annuity Premium
A whole life annuity is an annuity that makes regular payments to a person (the annuitant) for as long as he or she lives.
It is equivalent to a series of pure endowments payable at the end of 1, 2, 3, ... years and terminating with the death of the annuitant.
An ordinary whole life annuity is an annuity that makes payments at the end of each interval.
A whole life annuity due is an annuity that makes payments at the end of each interval.
A deferred whole life annuity is an annuity in which payments start after a certain amount of time.
The Whole Life Annuity calculation calculates the net single premium for a lifelong series of annual, semiannual, quarterly or monthly payments.
Input
| • life table | |
| • current age (x) | |
| • payments start at age | |
| (x for an annuity due) | |
| (x + 1 for an ordinary annuity) | |
| (x + 2, 3, ... for a deferred annuity) | |
| • annual, semiannual, quarterly or monthly payments | |
| • nominal annual rate | |
Note: FinKit always calculates for payments that start at the exact age specified.
Results
| • net single premium |
| • life annuity factor |
Example
| • | What is the net single premium for an ordinary annuity of $1,200 per year issued to a male, now aged 65, if interest is at 4 %?
Answer: $13,100.18. |
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