Definition of "Annuity"

A contract that allows you to invest money and have it grow on a tax-deferred basis. Annuities are either fixed or variable--or a combination of fixed and variableand can require lifetime or period payments.

A contract that provides for a series of payments at regular intervals, usually for the life of the payee or annuitant.

A contract between a life insurance company and an individual that guarantees income for a defined period, usually starting at retirement, to the person on whose life the contract is based. In exchange, the individual agrees to make periodic payment to the insurance company. All capital in the annuity grows tax-deferred.

A series of periodic payments payable for either a defined period or based on either a single life or a joint life expectancy or both.A contract sold by insurance companies that pays an income benefit for a specified period of time. The period can be specified as a number of years, the life of one individual or the lives of two individuals. There are a number of variations of the method that payments are made by buyer during the accumulation period, and the method that the benefits are paid by the insurance company during the liquidation period.

A contract issued by an insurance company that can generate a stream of income that is guaranteed for life or for a specific period of time. This contract is usually purchased for a fixed sum of money. A tax-deferred contract that can provide an income for a specified time period, such as a number of years or for life. There are two types of annuities: deferred annuities, which allow you to grow your assets tax deferred and convert your account balance to income payments at a later date, and immediate annuities, which generally allow you to receive income payments right away. An investment in which an insurance company agrees to pay an income for life or for a specified number of years. A retirement product that allows you to save for your future on an income tax-deferred basis and then allows you to choose a payout option that best meets your need for income when you retire?lump sum, income for life, or income for a certain period of time. See also Annuity rates.