What is an Annuity?

Picture this- Suppose you are get a large amount of money. Now with this big bag of money, you are confused as to what to do with this money, where to invest, how to get a steady stream of income out of it?

Annuity may be the answer you are looking for!

A fixed sum of money paid to someone periodically (Monthly, Quarterly, Half-yearly, Yearly) typically for the rest of their life or for the period one chooses. The goal of annuities is to provide a steady stream of income during retirement.

Effectively, an annuity is a contract between a person (called Annuitant) and an insurance company in which one makes a lump sum payment or series of payments and in return obtain regular payouts beginning either immediately or at some point in the future.