What is an annuity?
An annuity is a contractually-executed, relatively low-risk investment where the insured individual pays a lump-sum premium to their insurance provider up front. That money will be paid back to the policy holder in fixed, incremental amounts over a determined period of time.The money is used for investments in which the resulting profit to compensate the policy holder.
What is an immediate annuity?
An immediate annuity is the most basic type of annuity. A policy holder makes one lump-sum contribution where it's converted into an ongoing, guaranteed stream of income for a predetermined period.
What is a deferred annuity?
A deferred annuity is a contract with an insurance company that is viewed as a medium for accumulating savings later. This policy pays the policyholder a regular income, or a lump sum, at a future date.
