Annuity contract is just opposite of the insurance contact.
(i) The annuity contract liquidates gradually the accumulated funds whereas the life insurance contract provides gradual accumulation of funds.
(ii) The annuity contract is taken for one’s own benefit but the life assurance is generally for benefits of the dependents.
(iii) In annuity contract generally the payment stops at death whereas in life insurance the payment is usually given at death.
(iv) The premium in annuity contract is calculated on the basis of longevity of the annuitant but the premium in life insurance is based on the mortality of the policy-holder.
(v) Annuity is protection against living too long whereas life insurance contract is protection against living too short.
Both of these contracts complete the economic programme of an individual from beginning to an end.
When life insurance stops to serve, the annuity contract starts to help the individual up to his survival.