Perpetual Annuity

Perpetual Annuity A contractual agreement with a bank or an insurance company to which a person pays regular amounts over a period of time, or once in a lumpsum, to receive periodic sums in perpetuity. For example, monthly payments of a fixed instalment for a period of sever years will qualify for payment of the same instalment every month for ever afterwards. whereas payment of the same instalment every month for eleven years will assure payment of double the instalment amount every month in perpetuity. Perpetual annuity schemes offered by different insurance companies and banks are variations on the deferred annuity scheme

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