THE HISTORY OF ANNUITIES

• Over 2000 years ago, during Roman times, buyers, in return for a lump sum, received a fixed annual payment for life or a period certain. The first Life Expectancy Table was created by The Roman Domitius Ulpianus
• The wars during the Middle Ages were funded by tontines, annuity pools in which participants purchased a share and received a life annuity. Their survivors received a larger payment with the last survivor receiving the remaining principal, a veritable jackpot.
• European Governments, during the 18^th C., sold annuities that were state-guaranteed for lifetime income. Hundreds of laws were passed by the English Parliament to fund wars and provide a stipend to the Royal Family., the first issued was the State Tontine of 1963 costing 100£ per share with the buyer receiving income during the lifetime of their designated person, often a child. They could be assigned by will or deed or passed on to next of kin at death.
• In the United States annuities were not heavily purchased at first, mostly bought by attorneys or executors of estates to provide income to a beneficiary as describe in a last will and testament. A Pennsylvania company was formed in 1759 to benefit Presbyterian ministers and their families, and in 1912, the Pennsylvania Company for Insurance on Lives and Granting Annuities was the first American company to offer annuities to the general public.
• In the United States as multi-generational households began to fade, and especially during the Depression, investors turned to annuities as reliable investments.
• During the “New Deal” period, when FDR encouraged saving for retirement, group annuities for corporate pension plans developed. Tax deferred status was attractive.
• In 1952, the variable annuity was introduced, with a choice of vehicles to invest in, such as mutual funds.
• During the current difficult economic times annuities have become extremely popular and right now some companies have put a temporary hold on issuing annuities until they catch up with what they have in-house.
• Estimated annual annuity sales amount to over $200BB. Even though annuity contracts may have higher fees and commissions than some other investments, many have found the annuity structure to be beneficial in growing their retirement portfolios.

Blog Manager Marilyn Farber Jacobs is a License Advisor/Independent Insurance Agent and offers FREE Community Service appointments to let you know what others in your position are doing to protect, preserve and grow their retirement portfolios using annuities and/or life insurance.