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ANNUITY

Annuity means any fixed amount/sum paid every year to an individual, usually throughout the lifetime, or for a specific tenure. This is a type of investment/insurance which enables recipients to receive funds for specific lifetimes.

Definition

Annuity is a term which means any insurance agreement given by any financial institution with an intention towards paying out a fixed sum annually or at intervals based on the investment made by the individual initially. Investors purchase annuities with premium payments on a monthly basis or lump sum amounts. The financial institution then disburses monthly or yearly annuities or at other intervals for the pre-agreed tenure/duration. These are financial products that are mainly used for retirement purposes. The sum of money is received only after the annuitization period.

Use of Annuity in Real Estate

There are sometimes annuity plans offered by real estate developers. These involve investments in residential or commercial properties by investors. Thereafter, after a specified duration, the developer keeps paying money in the form of annuities to the investor for a fixed tenure or even till the completion of the project. Otherwise, they are mostly relevant in the insurance, financial services, and retirement planning segments.

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