Define Annuities

Annuities are contracts issued and distributed or sold by financial institutions where the funds are invested with the goal of paying out a fixed income stream later on.

Define annuities. What Does Annuity Mean. There are many ways in which we can define the annuity formula and it depends what we want to calculate. Fixed annuities are considered to be more conservative than variable annuities.

Formula for Annuity is as follow. Similarly your payout may come either as one lump-sum payment or as a series of payments over time. Legal Definition of annuity.

You buy an annuity by making either a single payment or a series of payments. Annuities are a form of retirement income product meaning that they provide you with a stream of income in your retirement years similar to superannuation or an account-based pension. Fixed annuities are similar to bank CDs and they are a smart choice for people who would normally put there money in bank CDs for saving.

In Define Annuities lets take a look at a Fixed Annuities. The annuity also gives investors the flexibility of making payments and that can be done in lump sum amount monthly quarterly etc. The payments are then invested and the annuitant begins to receive the principal plus earnings after retirement.

What is the definition of annuity. An annuity usually refers to a retirement account into which the annuitant makes payments over hisher working life. An annuity is an insurance product that allows you to swap your pension savings for a guaranteed regular income that will last for the rest of your life.

In other words its a system of making or receiving payments where the payment amount and time period between payments is equal. An annuity is a contract between you and an insurance company that requires the insurer to make payments to you either immediately or in the future. People who have serious health problems should be offered a higher rate than someone whos likely to live for many years.