Simply put, an annuity is a contract between an individual and an insurance company. It is designed to protect and grow their money, and then provide a stream of income during retirement. In fact, other than pensions, annuities are the
only products that provide guaranteed lifetime income.
Annuity Basics: How do they work?
An annuity is purchased by making a payment to an insurance company.
The annuity can grow over time.
The annuity is turned into a steady stream of retirement income payments.