Installment Refund Annuity

Installment Refund Annuity

An annuity with a provision stating that if the annuitant does not receive payments at least equal to the amount he/she paid as contributions, then some beneficiary (such as a relative of the annuitant) receives the difference in monthly installments over a period of time. This reduces the risk to the annuitant that the annuity will prove to be a bad investment. However, it does not protect the insurance company providing the annuity. See also: Cash Refund Annuity.
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On January 1, 2009, a husband, age 65, purchased for $21,053 an immediate installment refund annuity which pays $100 a month for life.
To find the duration of the guaranteed amount, in years, for a cash or installment refund annuity, divide the total amount guaranteed under the contract by the amount of one year's annuity payments.