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Life Annuity
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A life annuity is an annuity that pays out periodic income for as long as the annuitant (the beneficiary of the life annuity) is alive. A life annuity is sold by an insurance company; its payout is in the form of a predetermined amount that lasts until the death of the annuitant. A life annuity may be purchased all at once, or it may be bought over time, usually while the annuitant is working. The life annuity is generally used as a form of retirement income, received periodically (usually once a month). Upon death, payments from the life annuity cease. A life annuity can exist in a large variety of forms, and is generally sheltered from income tax until retirement.
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