Annuity

An annuity is a financial contract in which an individual or entity receives a fixed sum of money at regular intervals over a specified period of time. These payments can be made monthly, quarterly, annually, or any other agreed-upon frequency. An annuity can be purchased from an insurance company, and the payments usually continue only during the lifetime of the named beneficiary.

Fixed Annual Payment

A fixed annual payment is the amount of money that the beneficiary of an annuity receives each year. This payment amount is set when the annuity is purchased and does not change throughout the life of the annuity. The fixed annual payment is usually determined based on a number of factors, including the age and health of the beneficiary, the amount of money invested, and the expected length of time the annuity will be paid out.

Continues Only During the Lifetime of the Named Beneficiary

An annuity typically continues only during the lifetime of the named beneficiary. This means that once the beneficiary dies, the annuity payments stop. However, some annuities may also offer a death benefit that pays out to the beneficiary's heirs or estate upon their death.

Conclusion

In conclusion, an annuity is a financial contract that provides a fixed sum of money at regular intervals over a specified period of time. The fixed annual payment is the amount of money that the beneficiary receives each year, and it usually continues only during the beneficiary's lifetime. Annuities can be a useful tool for retirement planning or for providing a steady stream of income for a specific period of time.