Tuesday, November 24, 2009

Types of Annuities

In the business world , no one pay advance to purchase  commodities or assets  , most of customers pay some advance amount and other amount is payment on fixed installment and these installment have given on the basis which of type annuity , you have selected . So this article describes the
types annuity .

1.Annuity Certain

It is that type of annuity which is fixed for its future time . For example , if we purchase the a car and if agreement fixes the 10 installment of payment , then these annuities will be called annuity certain.

2. Perpetuity or perpetual annuity

It is that type of annuity which is payable all the time . There is no end of these annuities . For example , if a person has taken life insurance policy , then if he pays its premium up to his life , these these annuities will be called peretuity or perpetual annuity.

3. Immediate annuity

It is that type of annuity whose payment is done at the time of purchase of asset .

4. Annuity due

If annuity is fixed to pay in the beginning of time interval , then this annuity is called annuity due . Suppose payment of rent is advance of every month , then this is annuity due case .

5. Defferred annuities

If agreement is relating to payment of annuity in future date and upto that date annuities are not paid . Then , these annuity is called defferred annuity .

6. Forborne annuity

Any annuity whose payment is closed after some time , then these annuity is called forborne annuity .
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