Buying An Annuity
Ready to Retire?
What is An Annuity?
In its most general sense, an annuity is an agreement for one person or organization to pay another a stream or series of payments. Usually, the term “annuity” relates to a contract between you and a life insurance company, but a charity or a trust can take the place of the insurance company.
There are many categories of annuities. They can be classified by:
- Nature of the underlying investment – fixed or variable
- Primary purpose – accumulation or pay-out (deferred or immediate)
- Nature of pay-out commitment – fixed period, fixed amount, or lifetime
- Tax status – qualified or nonqualified
- Premium payment arrangement – single premium or flexible premium