Annuity

An annuity is a financial product that provides a series of payments made at equal intervals. It is often used as a means of securing an income stream for retirees, where individuals pay a lump sum or series of payments to an insurer who agrees to provide future payments over time. Annuities can be immediate or deferred, fixed or variable, depending on the details of the contract.

Annuity meaning with examples

• After retiring, Sarah felt reassured knowing she had purchased an annuity, which would ensure her a steady income throughout her retirement years.
• The financial advisor recommended considering an annuity as part of the investment strategy, as it could help mitigate risks associated with market fluctuations.
• John was pleased with his decision to convert his savings into an annuity, as he now receives monthly payments that cover his living expenses comfortably.
• In times of economic uncertainty, many individuals turn to annuities for the reliability of guaranteed income, facilitating long-term financial planning.
• Before finalizing the purchase of an annuity, Maria carefully examined the terms and conditions, ensuring that she understood the payout structure and any associated fees.