Real life Experiences
In life we meet with many unexpected things, which we many at times call unfortunate events. These events can permanently change how our lives will be leaved from that point henceforth. The events would be accidents, which bring a permanent disability to our bodies or even unfavorable acts of nature like earthquakes or hurricanes.

Some of these acts of nature come in such magnitude that almost makes the pre-planned contingency plans unsustainable like what happened to the millions of people living in Haiti.

That is why the insurance firms keeping knocking on our doors, selling all manners of insurance products. One of particular interest is life insurance, some call it life assurance policy. 

Unfortunately, our bodies are not immortal and we all must one day face death at some point, which is unknown. Probably, if you are a convict on the death sentence with a fixed execution date then you would know when you will die. That is where the life insurance comes with solutions or contingency plans. If you die today, and you are a bread winner who cares for your dependents, how will they finance their education? Live the standard of life that you have toiled for them over the years? The answers are with life insurance. We may come and go, but institutions or companies that have been in existence for centuries can certainly take care of that.

Is it worth paying life annuities?
Unlike other investment instruments like debentures, CDS, corporate bonds and other short term investment instruments; you can easily get the interest rate for the specific period and the inflation rate and work out whether you have benefited or not.

Life annuities would go on for the unforeseeable future and though we have economic forecast year-in, year-out, this forecast at times is way off the mark. Who would have predicted 40 years ago that China would be such a world economic force? Or that Niger or Afghanistan would be such a poor nation that it is today? Though we may never be in a position to forecast the future accurately, we need to plan and planning means paying a certain life annuity periodically- so that when the unfortunate time comes, we are financially prepared. We may want to go through all the complex mathematical calculations to see whether we are indeed getting a good deal, but the truth is these are all are but “intelligent guesses” they do aid in planning, yes! And, they are necessary mathematical operations in the insurance industries. But, I would say that paying life annuities is worth the cost. You may start paying one today and if you die after a week you will leave your dependents with something to laugh about and will financially benefit a great deal.

Politics
Contributions to pension schemes are exempted from tax in most nations. Though, some have put limits to the amount of money that one can contribute to a pension scheme tax-free, mainly to avoid abuse by wealthy individuals. Governments are usually very quick to look for ways and means to raise revenue and surprisingly they have exempted tax on pension. It is surprising, not because of the underlying logic which makes perfect sense, but given that the bulk of voters are actually people in their retirement. Most youth tend to be disengaged from politics. This may be another clever scheme to buy their rich votes. Civilized societies should certainly take good care of the elders who have often made huge contributions to the society during their life time. We only wish politicians did it with pure motives. 

Now, that we have stressed the need to have life annuities, let us look at the kinds available in the market.

Kinds of annuity
There is a big market for annuities, which has also been growing steadily as people begin to appreciate the need to have one.

First, we have a fixed annuity where the rate of interest is constant and predetermined, then, the variable annuity where the rate interest is often set by the insurance firms, depending on how they are performing in the market. Many other kinds of annuities would fall between the fixed and variable annuity features.

Mathematical calculations
It is important to note that because the annuity payments and receipts are made in different decades many-a-times. We cannot just sum up the total received and subtract the total amount paid and say that the extra amount is a gain. The time value of money needs to be factored in, and here is where we use the complex mathematical formulas to do that.

Though, you can look for websites that would ease the whole process of calculating the time value of money. You just need to enter the value, time, and rate and you have your answers at the click of a button.

Getting the right advice
Much as we may want to know everything, it is certainly not possible, and it is better to seek for specialized advice from those with experience and expertise in dealing in life annuities; and as much as possible, begin to plan for your life and all the unexpected circumstances as early as possible by investing in life annuities.