ANNUITY

Annuity

In the United States an annuity contract is created when an insured party, usually an individual, pays a life insurance company a single premium that will later be distributed back to the insured party over time. Annuity contracts traditionally provide a guaranteed distribution of income over time, such as via fixed payments, until the death of the person or persons named in the contract or until a final date, whichever comes first. However, the majority of modern annuity customers use annuities only to accumulate funds free of income and capital gains taxes and to later take lump-sum withdrawals without using the guaranteed-income-for-life feature.

The above text is a snippet from Wikipedia: Annuity (US financial products)
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annuity

Noun

  1. A specified income payable at stated intervals for a fixed or a contingent period, often for the recipient’s life, in consideration of a stipulated premium paid either in prior installment payments or in a single payment. For example, a retirement annuity paid to a public officer following his or her retirement.
  2. The right to receive such an income.
  3. The duty to make such a payment or payments.


The above text is a snippet from Wiktionary: annuity
and as such is available under the Creative Commons Attribution/Share-Alike License.

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