An annuity is a contract with an insurance company or financial institution that is designed to accumulate and grow funds from premiums contributions paid by an individual. At a later point in time you can choose to receive a series of income payments from your annuity that can be guaranteed to last as long as you live.  Aside from lifetime income, other benefits of an annuity include tax-deferred growth and a chance to avoid probate.

Types of Annuities include:

Traditional Fixed Annuity – Offers a declared fixed interest rate that is guaranteed for a specific period and guaranteed to never go below a specific percentage.

Fixed Index Annuity – Interest rate credited to your annuity contract is linked to specific market indices that you can choose on an annual basis. Once the interest is credited you are guaranteed that it can never go down based on future market fluctuations.

Immediate Annuity – You are guaranteed an income stream ranging from a specific period of time to your entire life. An immediate annuity offers a solution to the problem of outliving your money.

(Source: http://www.annuityfyi.com/types-of-annuities)

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