Annuity

Annuity:  

Annuity is an amount of fund invested by an individual or a financial institution in order to receive equal amount of money at equal time intervals. It can be defined as a fixed income source for an individual.

It’s an opportunity for an individual to raise a huge amount by investing less.

 

Types:  Annuity can be categorized into two types: Fixed annuity and Variable Annuity.

Fixed Annuity:  In this type annuitant will receive a fixed amount in a regular periodical interval.

Variable Annuity: In this annuitant will receive a huge amount of money in future if the invested organization does their job properly and if not will receive a small amount in return. Loss of principal amount is the biggest risk for this type of annuity.

Sources:  The main source for annuity is life insurance companies, financial service providers etc.

 

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