IPTM1135 - Fundamental concepts: what is a purchased life annuity?

This is an annuity purchased from an insurer that must have a life contingency within its terms. Often the annuity will be for life, but it could be for a term ascertainable by reference to life. For example, the annuity might end at the earlier of death or the expiration of a fixed term or some other specified event. Or it might continue after death for a specified term or according to some other specified rule.

It does not include a pension annuity.

The statutory definition of purchased life annuity is at ITTOIA05/S423 and of life annuity is at ITTOIA05/S473. A more detailed discussion is at IPTM4220.