what is a whole life annuity due 
a whole life annuity due is a financial product sold by insurance companies that requires annuity payments at the beginning of each monthly quarterly or annual period as opposed to at the end of the period this is a type of annuity that will provide the holder with payments during the distribution period for as long as they live after the annuitant passes on the insurance company retains any funds remaining annuities are usually purchased by investors who want to secure some type of income stream during retirement the accumulation phase occurs as payments are being made by the buyer of the contract to the insurance company the liquidation phase occurs when the insurance company makes payments to the annuitant understanding whole life annuity dueannuities are financial products that are often purchased as part of a retirement plan to ensure income during the retirement years investors make payments into the annuity and then upon annuitization the annuitant will receive regular payments annuities can be structured to make payments for a fixed length of time commonly 20 years or make payments for as long as the annuitant and their spouse is alive actuaries work with insurance companies to apply mathematical and statistical models to assess risk when determining policies and rates an annuity due requires payments made at the beginning as opposed to the end of each annuity period annuity due payments received by an individual legally represent an asset meanwhile the individual paying the annuity due has a legal debt liability requiring periodic payments income payments from an annuity are taxed as ordinary income unless the annuity is kept in a roth ira periodic or lump sumsthe major decision for annuity investors is whether to take periodic or lump sum payments this is when the time value of money comes into play this means the money in your hands today is worth more than money sometime later or conversely money received at some future date is worth less than money in your pocket today thus if you receive a 100 000 lump sum payout today you ll want to compare that with receiving a stream of payments over many years which is worth more depends on a number of factors such as the implied interest rate or discount rate of the payments the risk and return of investing the lump sum and your need for immediate cash lump sum payments open you to risk if the money is invested aggressively you could earn outsized returns beyond what the periodic payments could provide or you could lose it all if the markets or your investments sour you might also be forced or tempted to spend all of a lump sum leaving you with nothing it s the reason many people opt for periodic payments when given the chance in addition there are tax consequences tied to each method 