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annuity
noun
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This is a payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. Under an annuity certain, a specified number of payments are made, after which the annuity stops. With a contingent annuity, each payment depends on the continuance of a given status; for example, a life annuity continues only as long as the recipient survives. Contingent annuities depend on shared risk. Everyone pays in until the annuity begins; some will live long enough to collect more than they have paid, while others will not live long enough to get back the money they invested.
Synonyms
Examples of annuity in a Sentence
Word History
Middle English annuite, from Anglo-French annuité, from Medieval Latin annuitat-, annuitas, from Latin annuus yearly
15th century, in the meaning defined at sense 1
Dictionary Entries Near annuity
Cite this Entry
“Annuity.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/annuity. Accessed 23 Dec. 2024.
Kids Definition
annuity
nounLegal Definition
annuity
nouncalled also joint-and-last-survivor annuity, joint and survivorship annuity, joint life and survivorship annuity
compare joint life annuity in this entrycalled also joint annuity
compare joint-and-survivor annuity in this entrycalled also straight life annuity
Medieval Latin annuitas, from Latin annuus yearly
More from Merriam-Webster on annuity
Nglish: Translation of annuity for Spanish Speakers
Britannica English: Translation of annuity for Arabic Speakers
Britannica.com: Encyclopedia article about annuity
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