An annuity is a financial product that provides the beneficiary or "annuitant" with a steady stream of payments, typically over a fixed period of time. Life annuities are the most common type of annuity, but some annuities are not connected to life insurance.

Types of Annuities:

  • Immediate Annuities: These annuities start providing payments to the annuitant almost immediately after the initial investment.
  • Deferred Annuities: With deferred annuities, the buyer or beneficiary has the opportunity to accumulate funds over a specific period before receiving payments.

Varieties of Annuities:

  • Fixed Annuities: Fixed annuities offer a predictable payment schedule as the amounts are predetermined and do not change over time, providing stability for the annuitant.
  • Variable Annuities: Variable annuities offer payments that can vary based on the performance of the underlying investment options chosen by the annuitant, allowing for potential growth but also carrying investment risk.

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