Annuities

The  term "annuity" refers to an insurance contract issued and distributed  by financial institutions with the intention of paying out invested  funds in a fixed income stream in the future. Investors invest in or  purchase annuities with monthly premiums or lump-sum payments.  The holding institution issues a stream of payments in the future for a  specified period of time or for the remainder of the annuitant's life.  Annuities are mainly used for retirement purposes and help individuals address the risk of outliving their savings. 

• Annuities are financial products that offer a guaranteed income stream, usually for retirees.
• The  accumulation phase is the first stage of an annuity, whereby investors  fund the product with either a lump sum or periodic payments.
• The annuitant begins receiving payments after the annuitization period for a fixed period or for the rest of their life.
• Annuities can be structured into different kinds of instruments, which gives investors flexibility.
• These products can be categorized into immediate and deferred annuities and may be structured as fixed or variable.