annuity

noun

an·​nu·​i·​ty ə-ˈnü-ə-tē 

-ˈnyü-

plural annuities

1

: a sum of money payable yearly or at other regular intervals

2

: the right to receive an annuity

3

: a contract or agreement providing for the payment of an annuity

Did you know?

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

• allocation
• allotment
• appropriation
• entitlement
• grant
• subsidy
• subvention

Examples of annuity in a Sentence

Part of her retirement income will come from an annuity.

his grandfather's will provided him with an annuity of $5,000 a year to be used for school expenses

Recent Examples on the Web

The annuity is paid out as one immediate payment followed by 29 annual payments, according to the Mega Millions website. —Tanya Wildt, Detroit Free Press, 29 Oct. 2024

Another hybrid pension option that could be an alternative for Boeing and the machinists is a variable annuity plan, where payouts are indexed to investment returns, making employers less exposed in the event of underperformance. —Jeremy Bogaisky, Forbes, 26 Oct. 2024

The annuity, based on a percentage of the trust asset plus interest, can attract older adults looking for steady income. —Medora Lee, USA TODAY, 25 Oct. 2024

The next Powerball jackpot, worth $478 million in annuity or $230.5 million in cash, is on Wednesday, Oct. 23. —Danielle Jennings, People.com, 23 Oct. 2024

Word History

Etymology

Middle English annuite, from Anglo-French annuité, from Medieval Latin annuitat-, annuitas, from Latin annuus yearly

First Known Use

15th century, in the meaning defined at sense 1

Kids Definition

annuity

noun

an·​nu·​ity ə-ˈn(y)ü-ət-ē 

plural annuities

1

: a sum of money paid at regular intervals

2

: an insurance contract providing for the payment of an annuity

Legal Definition

annuity

noun

an·​nu·​ity ə-ˈnü-ə-tē, -ˈnyü- 

plural annuities

1

: an amount payable at regular intervals (as yearly or quarterly) for a certain or uncertain period

2

: the grant of or the right to receive an annuity

his will included annuities for several old friends

3

: a contract (as with an insurance company) under which one or more persons receive annuities in return for prior fixed payments made by themselves or another (as an employer)

— annuity certain plural annuities certain

: an annuity payable over a specified period even if the annuitant dies

— annuity due plural annuities due

: an immediate annuity in which the payment of the benefits is made at the beginning of each payment interval rather than at the end

— contingent annuity

: an annuity whose starting or ending date depends on the occurrence of an event (as the death of the annuitant) whose date is uncertain

— conventional annuity

: an annuity under which the annuitant receives a specified minimum amount at each payment compare variable annuity in this entry

— deferred annuity

: an annuity in which payment of benefits is delayed until a particular time (as at retirement) compare immediate annuity in this entry

— group annuity

: a pension plan paying annuity benefits at retirement for all eligible persons under a single master contract usually issued to an employer for the benefit of its employees

— immediate annuity

: an annuity purchased with a single premium in which payment of benefits begins within the first payment interval (as within a year) compare deferred annuity in this entry

— joint-and-survivor annuity

: an annuity payable as long as any of the two or more annuitants remains alive

called also joint-and-last-survivor annuity, joint and survivorship annuity, joint life and survivorship annuity

compare joint life annuity in this entry

— joint life annuity

: an annuity payable only until the death of any of the annuitants

called also joint annuity

compare joint-and-survivor annuity in this entry

— life annuity

: an annuity payable during the annuitant's lifetime and terminating at death

called also straight life annuity

— life income-period certain annuity

: an annuity that guarantees a minimum number of payments even if the annuitant dies before the minimum amount is paid or a minimum number of payments plus income for life if the annuitant is still alive after the minimum amount is paid

— refund annuity

: an annuity in which payments to the annuitant or to the annuitant's estate or to a beneficiary are guaranteed to equal at least the amount of the premium paid for the annuity

— straight life annuity

: life annuity in this entry

— variable annuity \ ˈver-​ē-​ə-​bəl-​ \

: an annuity that is backed primarily by a fund of common stocks and whose payments go up or down depending on how well the stocks perform compare conventional annuity in this entry, variable life insurance at life insurance

Etymology

Medieval Latin annuitas, from Latin annuus yearly