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Interests and Annuities, José Eduardo Chavez Parra LIMNBIS91M FINANCES …

- - - - Contingent Annuity
        Designated by an annuitant
        Not stop making payments
        Annuitant and contingent have passed away. Example: If the policy does not allow for a contingent annuitant, the annuity stops making payments when the annuitant dies. A contingent annuitant can be thought of as the second beneficiary of an annuity.
  - - - General Annuity
        Payments not coincide with interest periods.
        Once an equivalent interest rate is determined with that equivalent rate being compounded as often as the payments are made.
        Example: A general annuity can be reduced to a simple annuity if we make the time periods and interest periods coincide.
  - - - Ordinary Annuity
        Equal payments
        At the end of consecutive periods
        Frequently, every week, monthly, etc.
        Example: Interest payments from bonds, which are generally made semiannually, and quarterly dividends from a stock that has maintained stable payout levels for years.
  - - - Immediate Annuity
        Individual and an insurance company
        Pays guaranteed income
        Almost Immediately
        Example: Individuals typically buy immediate payment annuities by paying an insurance company a lump sum of money. The insurance company, in turn, promises to pay the annuitant a regular income, according to the terms of the contract. The amount of those payments is calculated by the insurer, based on such factors as the annuitant's age, prevailing interest rates, and how long the payments are to continue