PERPETUAL ANNUITY Meaning and
Definition
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A perpetual annuity, also known as an everlasting annuity or infinite annuity, refers to a financial arrangement that involves receiving a fixed amount of money at regular intervals, indefinitely without any predetermined end date. It is an open-ended financial instrument where the payments continue perpetually without ceasing. This type of annuity provides a continuous income stream to the annuitant, offering financial security for an indefinite period.
Perpetual annuities are typically issued by governments or corporate entities seeking to raise funds with a long-term perspective. The annuitant invests a lump sum amount, often called the principal or the capital, and in return, they receive periodic payments for the rest of their life or for an extended period, without any specific termination date.
The payments made in perpetual annuities generally have a fixed schedule, such as monthly, quarterly, or annually, and the amount is predetermined at the time of the investment. The level of payment can vary based on the terms established by the seller and the investor's initial purchasing power.
Unlike fixed-term annuities that have a predefined maturity period, perpetual annuities work on the principle of never-ending payments, ensuring continuous income to the annuitant. However, due to the indefinite nature of these annuities, it is essential to carefully consider the issuing entity's financial stability and creditworthiness to mitigate the risk of default or potential changes in payment terms over time.
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An a., to be paid for all time to the annuitant and to his heirs after his death.
A practical medical dictionary. By Stedman, Thomas Lathrop. Published 1920.
Common Misspellings for PERPETUAL ANNUITY
- oerpetual annuity
- lerpetual annuity
- -erpetual annuity
- 0erpetual annuity
- pwrpetual annuity
- psrpetual annuity
- pdrpetual annuity
- prrpetual annuity
- p4rpetual annuity
- p3rpetual annuity
- peepetual annuity
- pedpetual annuity
- pefpetual annuity
- petpetual annuity
- pe5petual annuity
- pe4petual annuity
- peroetual annuity
- perletual annuity
- per-etual annuity
- per0etual annuity
Etymology of PERPETUAL ANNUITY
The word "perpetual" comes from the Latin word "perpetuus", which means "continuous" or "uninterrupted". It is derived from the combination of "per", meaning "through or complete", and "petere", meaning "to seek or go towards".
The word "annuity" comes from the Latin word "annus", meaning "year". It originally referred to a yearly allowance or income. The term "annuity" then evolved to describe a financial arrangement where a fixed sum of money is paid periodically, usually annually, to an individual, typically for the rest of their life.
So, the etymology of "perpetual annuity" combines "perpetual" meaning continuous or uninterrupted and "annuity" meaning a yearly payment, resulting in a financial arrangement that provides a continuous income over an extended period.
