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Definition of «annuity»

An annuity is a financial product that pays out a fixed sum of money periodically, typically for a set number of years or for life. It is often used as a retirement income stream and can be purchased from an insurance company. Annuities are generally considered to be low-risk investments because they provide steady payments without the risk associated with stocks or other securities.

Usage examples

  1. Peter decided to purchase an immediate annuity with a lump sum of money he had saved, ensuring a fixed income for the rest of his life.
  2. Sarah opted for a fixed annuity, which guarantees a specific interest rate and payment amount over a specified term.
  3. John inherited an annuity from his parents, which continued to pay him a monthly income even after their passing.
  4. A deferred annuity gives individuals the option to accumulate funds over a designated period before initiating regular payouts, often used to supplement income during retirement.
  5. Rachel included an annuitization option in her annuity contract, allowing her to convert her account balance into a series of payments over a chosen time frame.
  6. Tom decided to surrender his annuity, opting to receive a lump sum payment instead of continuing to receive regular annuity payments.

Phrases with «annuity»

Sentences with «annuity»

  • The same criticisms of variable annuity contracts, however, were valid before the financial crisis — and those contracts nonetheless helped many people survive the 50 percent plunge in the stock market. (cnbc.com)
  • Until recently, there have been some barriers to using these types of annuities in retirement plans. (newretirement.com)
  • A client should give careful consideration to his or her individual situation, needs and goals before purchasing fixed annuity with index - linked interest. (jackson.com)
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See also

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