Assuming you mean annuities that payout a guaranteed income over your lifetime, here’s basic explanation. An annuity is a mortality insurance product with two basic moving parts: the company crediting rate to your annuity and the mortality credits based on age. The crediting rate is a result of the portfolio return and the company keeping a portion of that return for profit margin. A mortality credit is an underwriting assessment based on life expectancy. The older you are the greater the size of the credit. The combination of the credited interest rate and mortality credit make up your life time payment.
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Assuming you mean annuities that payout a guaranteed income over your lifetime, here’s basic explanation. An annuity is a mortality insurance product with two basic moving parts: the company crediting rate to your annuity and the mortality credits based on age. The crediting rate is a result of the portfolio return and the company keeping a portion of that return for profit margin. A mortality credit is an underwriting assessment based on life expectancy. The older you are the greater the size of the credit. The combination of the credited interest rate and mortality credit make up your life time payment.