GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
^
50% - Moderately

Private Annuity


Synonyms:estate transfer annuity, family annuity
Filed Under: annuities, financial-banking, investments, taxation
Tags: annuity, banking, investment, taxes
 

Definition of private annuity

private annuity
1. A financial agreement between two parties where one party agrees to transfer an asset to another other party in exchange for income payments for the rest of their life. Neither party of the agreement may be an insurance company for the annuity to be considered a private annuity. In many cases, private annuities are used in estate management to minimize gift and estate taxes.

Related Terms and Acronyms:

  • annuitization   The process of turning a retirement plan or annuity into income in the form of periodic payments or a single lump sum.
  • annuity   A financial instrument that disperses a number of payments over a set period of time.
  • annuity contract   A contract that outlines each party's responsibilities as they relate to an annuity.
  • charitable gift annuity (CGA)   A method to facilitate charitable giving whereby an individual transfers assets to a charity in exchange for a tax deduction and lifetime retirement income payments from the charity.
      ➥  A form of planned giving.
  • estate planning   The process of determining how assets will be dispersed after an individual's death, ideally in the most tax-efficient way possible.
  • life annuity   An annuity that will continue to make payments until the death of the annuitant.
  • life insurance   An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
      ➥  CanEquity offers life insurance.
  • payout phase   The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
  • straight life annuity   An annuity that stops all payments upon the annuitant's death.
  • tax deferred annuity (TDA)   A type of annuity where taxes are deferred until the annuitant decides to withdraw money from the annuity.
      ➥  More commonly known as a Tax Sheltered Annuity (TSA).

More Related Terms and Acronyms

Search the Glossary

The Greatest Mortgage Calculator
Some would say that you can't improve on perfection — we respectfully disagree. We feel our new mortgage calculator is the greatest we've ever made and the best on the internet. Try it today and compare different mortgage rates, terms and amortizations.
Greatest Mortgage Calculator
 
Compare Mortgage Rates Here
Interested in viewing current mortgage rates? Compare rates from all the best lenders in Canada using our mortgage rate comparison chart and find the lowest one.
Mortgage Rate Comparison
 
Don't get a second mortgage!
The rates for a second mortgage can run as high as 19%.

Use your home equity as an advantage! Consolidate your debt with us and enjoy our 5-year rate of 1.84%.
Worried Man