What is an Annuity?

By Compuquotes Team on November 1st, 2010

Question: What is an Annuity?

Answer: An annuity is a tax-deferred insurance product that can provide income for a set amount of time--either a certain number of years or for a lifetime.

Annuities can be deferred or immediate. An immediate annuity allows investors to receive income payments immediately, but disbursement must begin within 12 months of the original issue date. Deferred annuities, on the other hand, allow investors to grow assets tax-deferred, and can be converted to income payments at a later date.

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