
Annuities are financial products that provide a guaranteed income stream in exchange for a lump sum payment or series of payments. There are several different types of annuities, including fixed, variable, and indexed, each with its own features and benefits.
Here is an overview of how annuities work:
An individual enters into a contract with an insurance company to purchase an annuity.
The individual makes a lump sum payment or a series of payments to the insurance company.
The insurance company invests the payments and earns a return on the investment.
The individual can choose to receive the income from the annuity in a number of ways, such as:
A fixed amount each month...