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.