Life Insurance Annuity

646 Words2 Pages

As a tool for investment and financial security, annuities have been around for quite a long time. Annuities first started in the ancient civilization of the Roman Empire as a way for Roman citizens to receive a yearly payment for their lifetimes or for several years in exchange for a large upfront payment. According to Annuity.com, early Roman annuities were often given to Roman legionnaires as payment for years of faithful military service. As time passed, the modern annuity began to take shape.

During medieval times, the concept of lifetime annuities bought with a single initial premium became a way that was popular among nobles for funding the constant warfare that was a fact of life in that period. According to the Annuity Museum, records show that one of the most popular annuities of the medieval era was called the tontine. This annuity was one where the participants purchased a share in an annuity pool, and then, in turn, received a lifetime annuity. As time passed, each participant would receive a larger payment because the payments were divided among the surviving participants of the initial annuity pool. As the participants died off, ever increasing payments would be made to them. Finally, the sole remaining survivor would reap the benefits of the remaining annuity principal. One of the oldest and longest lasting tontines was the annuity called the State Tontine of 1693, which was started in the United Kingdom as a way to pay for its many wars with France.

As the modern financial system started to develop, Dr. James Dodson of England began the formation of the Equitable Life Assurance Society of London in 1756. According to Edwin W. Kopf in his work, “The Early History of The Annuity,” this was one of the first com...

... middle of paper ...

...highly volatile economic climate, perhaps the advice of Babe Ruth is worth listening to. The life insurance annuity of today provides a level of safety and security for an investor's money that simply cannot be matched by many traditional investments. Considering this factor, one might do very well to rely on a modern life insurance annuity for their future economic and financial security.

Sources

Edwin W. Kopf, “The Early History of the Annuity,” Casualty Actuarial Society

http://www.casact.org/pubs/proceed/proceed26/26225.pdf

“The Glorious History of Annuities,” Annuity.com

http://www.annuity.com/content/articles/glorious-history-annuities

“History of Annuities,” Annuity Museum

http://www.immediateannuities.com/annuitymuseum/historyofannuities/

“History of Annuities,” Save Wealth Financial

http://www.savewealth.com/retirement/annuities/history/

Open Document