Annuity Defined

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Annuity defined. An annuity guarantees that you receive a regular income during your retirement. The grant of or the right to receive an annuity his will included annuities. Annuity a series of equal payments at fixed intervals from an original lump sum INVESTMENTWhere an annuity has a fixed time span it is termed an annuity certain and the periodic receipts comprise both a phased repayment of principal the original lump sum payment and interest such that at the end of the fixed term there is a zero balance on the account.

Annuities are a contract between yourself and an insurance company to receive regular payments beginning either immediately or in the future. You take 25 of your pot as a tax-free lump sum and you decide to buy an annuity with the remaining 100000. Immediate annuities by contrast.

In the US an annuity is a contract for a fixed sum of money usually paid by an insurance company to an investor in a stream of cash flows over a period of time typically as a means of saving for retirement. An annuity is an insurance product designed to generate payments immediately or in the future to the annuity owner or a designated payee. An amount payable at regular intervals as yearly or quarterly for a certain or uncertain period.

Before investing in one its important to understand their pros and cons. If youve saved into a defined contribution pension scheme during your working life youll have to decide what to do with the pension fund youve built up when you approach retirement age. Annuities are a type of contract that allows one party the annuitant to make regular deposits or premiums and the other party the company selling the annuity agrees to pay back those depositors or paid-in customers with an agreed-upon sum at given intervals.

A deferred annuity is an insurance contract that promises to pay the buyer a regular income or a lump sum of money at some date in the future. For example you have a pension pot of 133333 and you retire at 65. 1 a specified income payable at stated intervals for a fixed or a contingent period often for the recipients life in consideration of a stipulated premium paid either in prior installment payments or in a single payment.

Legal Definition of annuity. Annuities are insurance contracts that provide guaranteed payments for a set time period or for life. ANNUITIES DEFINED annuity 1 noun pluralannuities.