Annuity principal(redirected from Annuity Principals)
The annuity principal is the sum of money you use to buy an annuity and the base on which annuity earnings accumulate.
If you're buying a deferred annuity, you may make a one-time -- or single premium -- purchase, or you may build your annuity principal with a series of regular or intermittent payments.
For example, if you own an annuity in an employer-sponsored retirement plan, you add to your principal each time you defer some of your income into your account -- typically every time you're paid.
When you buy an immediate annuity, you commit your annuity principal as a lump sum, and that amount is one of the key factors that determines the amount of your annuity income.