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A Glance At Annuity History |
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Annuities, a form of long term saving on which we rack our brains, comparing the taxes, the returns, the quotes, and manipulating how to emphasize one feature over another – was in vogue since the past two thousand years and more! Can you believe it? Well it is true! The early Romans bought similar financial instruments called annua or annual stipends, against a lump sum amount, from ‘speculators’. Whoever bought these annuas was guaranteed a fixed annual payment for life, or sometimes for a specified period of time. Does it seem interesting? Taking a glance at the annuity history can sure be fun and a break from the hard-core, complex calculations. |
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You know who created the first life expectancy table? I am sure you don’t and this is not a class test either. The answer is Roman Domitius Ulpianus. They are the first annuity dealers on earth. |
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| Later, it was in the seventeenth century that the ruling machinery first formally accepted annuities as fund raising instruments. They needed money to finance wars that were constantly raging all over Europe and fund the economic initiatives in the countries. Tontine, a typical form of annuity, is found mentioned in historic records. These were a number of annuities pooled together. Individuals purchased a fraction of this pool and enjoyed the benefits of a life annuity. Since the whole annuity pool was shared among a group of people, the share of benefit received by the remaining individuals in the group increased as a participant died. When ‘all less one’ participants expired, the last person to live received the remaining principal. This form of annuity invoked a chance factor, which was enjoyed thoroughly by the society, and made a promise to make the last survivor a winner in every way. |
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Annuities became legalized and popular in Europe during the 18th century. It was a feature of the high societies. In the America , however, the popularity of the annuities caught on rather slowly. Only 1.5 percent of the total life insurance premiums collected in the US between 1866 and 1920 went to annuities. |
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The Great Depression significantly proved annuities to be a useful source to provide insurance as well as financial security. Investors, at that time, needed a more reliable and solid form of investment to save themselves from financial instability, and grabbed the promise of stability offered by annuities. This promise of stability, security, and gain is still lived today. Individuals who have experienced the fortunes and benefits offered by annuities come back for more. For further information on annuities, you can consult the experts and annuity specialists at AnnuityLibrary.com. To submit your questions, Click here or calltoll-free at 1-800-998-4056. |
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 ANNUITY ARTICLES |
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