annuity

In the older sense of the term, a yearly payment of a certain sum of money granted to another in fee, for life, or for years. In the modern sense, a right, bequeathed, donated, or purchased, to receive fixed or certain periodical payments, without contingency, either perpetually or for life or a stated period of time, but not including any interest of the annuitant in the principal fund or source from which the payments derive, his interest being only in the payments themselves. Commonwealth v. Beisel, 338 Pa 519, 13 A2d 419, 128 ALR 978; 4 Am J2d Annui § 1. Typical modern annuities are those payable by insurance companies. 4 Am J2d Annui § 1. The annuity itself is the totality of the payments to be made under the contract. Where the payments are to be made to the annuitant until his death, the annuity is a life annuity. Where the payments are terminable by the voluntary act of the annuitant, the annuity is a term annuity. Bodine v Commissioner (CA3) 103 F2d 982. Many of the payments called for by retirement plans of businesses and industries are annuities, although referred to as pensions. Annuities payable under retirement plans are not gratuities in the same sense as pensions paid to retired members of the armed forces, since such annuities are, in part, payable by contributions made by the annuitants themselves. Even where the annuitant makes no contribution in specie, the annuity is nevertheless not a gratuity, since it is in a proper sense provided for him as consideration for his services performed. 40Am J1st Pens §3. An annuity contract is a security within the meaning of the Federal Securities Act. Securities & Exchange Com. v Variable Annuity Life Ins. Co. 359 US 65, 3 L Ed 2d 640, 79 S Ct 618. See simple annuity; straight annuity; refund annuity.