What Is An Annuity?

An annuity pays a monthly (or quarterly, semi­annual, or annual) income benefit for the life of a person or for a specified period of time. The annuitant (insured) can never outlive the income from the annuity. While the basic purpose of life insurance is to provide an income for a beneficiary at the death of the insured, the annuity is intended to provide an income for the life of the annuitant. There are two basic types of annuities, fixed annuities, which pay a fixed income backed by fixed dollar investment such as secure bonds and mortgages, and variable annuities, which vary in payment according to the value of stock and bond investments.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

Additional Insurance Articles

Search LawInfo's Insurance Resources

Lead Counsel Rated Law Firm

Click Here to Learn More