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We know the free life and the busy life. What are the specificities of life futures? Back on this type of contract of sale of a real estate.

The life annuity

The life annuity

What is the term life?

The life annuity is more generally called the forward sale. Proof that the forward sale is a kind of life. In both cases, the payment of the property is spread over the duration in several monthly installments. The difference with life is that the term of payment is here known in advance and limited in time. The payment generally lasts for a period of ten to fifteen years while, in the context of a life annuity, it is carried out until the death of the seller.
In addition, as in a life sale agreement, there may also be payment of a bouquet, ie a sum repaying a first part of the capital at the time of signing the contract.
Little more: the seller benefits here, as in the framework of a life annuity occupied, ofa right of habitation.

Seller: What are the benefits of life futures?

Although the two types of contracts are similar, the forward sales contract offers benefits to the seller that the life annuity contract does not offer.

  • The death of the seller does not terminate the payment of the monthly payments: if the seller dies before the end of the term determined in the contract, his heirs will inherit monthly payments.
  • The monthly rent of a forward sale is not taxable contrary to the life annuity.
  • From a moral point of view, here there is no question of speculating on the future death of the seller since the end date of the deadlines is fixed in advance.
  • The indexation of the rent is fixed on the cost of construction, construction cost often higher than the rate of the annuity. Annuities on forward sales are thus often superior to life annuities.

Buyer: What are the benefits of the life annuity?

There are also benefits for the buyer of a real estate property.

  • The buyer is not likely to lose his money as with a sales contract in life since the payment of monthly payments is fixed in time. He knows the approximate price of the property in advance.
  • The forward sale represents for the purchaser a good financial investment.


Video Instruction: Money for Life: Understanding Life Annuities