Insurance term
Annuity
An annuity is a contract, usually sold by an insurance company, that is designed to provide a stream of income, often during retirement. It is commonly funded with a lump sum or a series of payments, and the money may grow tax-deferred until withdrawals begin, depending on the type of annuity and tax rules.
Example
Maria bought a deferred annuity with part of her retirement savings so she could receive monthly income later in life.
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