What is an annuity & how does it work?

At its most basic level, an annuity is a contract between you and an insurance company that shifts a portion of risk away from you and onto the company. There are 2 basic types of annuities: Income annuities can offer a payout for life or a set period of time in return for a lump-sum investment.

What is an annuity contract?

Annuity Contract: What It Means and How It Works An annuity contract is a written agreement between an insurance company and a customer outlining each party's obligations in an annuity agreement. more

What is a fixed annuity?

A fixed annuity pays you a guaranteed annual minimum, ensuring you receive a baseline of income from the contract each year. Depending on the details of the annuity contract, a fixed annuity could pay you more in years when the annuity company’s investments earn higher returns.