What is Annuity?

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An annuity is a payment to a person that is fixed, regular and often continues with no predetermined end of such a payment, called perpetuity.

 

Usually annuity is given to a retired person out of the corpus he/she has accumulated over his/her working years. An annuity could also have a terminating clause where after a certain number of years the payment will stop. There is also a concept of life annuity where the person is paid a fixed sum of money, at regular interval over the lifetime of the person.

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