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Subject:  Re: Annuities again Date:  8/17/2019  1:07 PM
Author:  intercst Number:  94927 of 95813

aj485 writes,

15 yr Period Certain
Female age 65
Monthly income, Qualified assets
Payments starting 10/1/2019
No inflation rider
$200,000 initial investment

Monthly payment equals $1313.19.
Total payments $236,374.66
IRR 2.28%

You can see that this is just a Period Certain Annuity (without the Life Annuity in front of it) by looking at the total payments, divided by the monthly payments - that equals 180, which is the number of months in 15 years.

This one is cheap because the insurance company knows that the payout is limited to 15 years and they won't have to pay out for the annuitant's lifetime. It's just a Fixed Period annuity without the Guaranteed Term part.

A Life Annuity with a 15 year Certain Period (Fixed Period/Guaranteed Term) will likely have significantly lower monthly payments.


If there's no life contingency, why are they specifying "Female age 65"?

A fixed term, 15 yr annuity should cost the same no matter the sex or age of the annuitant.

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