Annuities are a type of investment that can provide a steady stream of income for a fixed period or for the rest of one’s life. They have been around for centuries and are still a popular option for those looking to secure their financial future. In this article, we will explore the definition and meaning of annuities, their origin, and their associations.
Definitions
An annuity is a financial product that pays out a fixed amount of money at regular intervals, typically monthly or annually. It is essentially a contract between an individual and an insurance company or financial institution, where the individual makes payments into the annuity and, in return, receives a guaranteed income for a set period or for life.
Origin
The concept of annuities dates back to ancient Rome, where citizens would make a lump sum payment to the government in exchange for a guaranteed income stream for life. In the 17th century, annuities were used by European governments to finance wars and other expenses. Today, annuities are primarily used as a retirement income tool.
Meaning in different dictionaries
According to Merriam-Webster, an annuity is “an investment that provides a series of payments over a period of time.” The Oxford English Dictionary defines it as “a fixed sum of money paid to someone each year, typically for the rest of their life.” The Cambridge Dictionary defines it as “a financial product that pays a regular income to someone for the rest of their life, or for a fixed period.”
Associations
Annuities are often associated with retirement planning, as they can provide a reliable source of income during one’s golden years. They are also associated with insurance companies, as they are often sold by insurance agents. Annuities can be either immediate or deferred, depending on when the payments begin.
Synonyms
Some synonyms for annuities include pension, allowance, stipend, and income stream.
Antonyms
Some antonyms for annuities include lump sum payment, one-time payment, and non-recurring payment.
The same root words
The root word of annuities is “annus,” which means “year” in Latin. Other words with the same root include annual, anniversary, and annuity.
Example Sentences
- “John purchased an annuity to ensure a steady stream of income during his retirement years.”
- “The insurance company offers both immediate and deferred annuities to its customers.”
- “Mary receives a monthly annuity payment from her late husband’s pension plan.”
- “An annuity can be a great way to supplement your retirement income.”