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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.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified insurance lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local insurance attorney to discuss your specific legal situation.