An annuity is a financial product that provides a steady stream of income over a specified period of time, typically for the rest of the recipient’s life. It is a contract between an individual and an insurance company, where the individual pays a lump sum or regular payments to the insurance company, and in return, the insurance company pays out a guaranteed income stream.
Definitions
An annuity is a financial product that provides a guaranteed income stream for a specified period of time. It is a contract between an individual and an insurance company, where the individual pays a lump sum or regular payments to the insurance company, and in return, the insurance company pays out a guaranteed income stream.
Origin
The term “annuity” comes from the Latin word “annus,” which means “year.” Annuities have been used for centuries as a way to provide a guaranteed income stream for retirees.
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 an annuity as “a fixed sum of money paid to someone each year, typically for the rest of their life.”
Associations
Annuities are often associated with retirement planning, as they provide a guaranteed income stream for retirees. They are also associated with insurance companies, as they are typically sold by insurance companies.
Synonyms
Some synonyms for annuity include pension, allowance, stipend, and income.
Antonyms
Antonyms for annuity include lump sum, one-time payment, and payout.
The same root words
Words with the same root as annuity include annual, anniversary, and annals.
Example Sentences
- John decided to purchase an annuity to ensure he would have a steady income in retirement.
- The insurance company offered a variety of annuity options to its customers.
- Mary’s annuity payments will continue for the rest of her life.
- An annuity can be a good option for those who want a guaranteed income in retirement.