Annuitiy are contracts in which insurance companies provide periodic payments in return for premiums you paid. Annuities are generally purchased for retirement income.
For people who are rich, buy an annuity to secure future income, even if their assets are missing. They get certainty of income.
For people with modest wealth, annuities can help provide a sustainable source of income so that it remains financially independent in the old days. In addition, they will be free from the hassles of managing investments and assets.
There are many categories of annuities, which can be classified according to the nature of the underlying investment, the accumulation period, the nature of commitment and payment of premium setting.
