annuity business definition

A stream of equal payments that occur at predetermined intervals (that is, monthly or annually). The payments may continue for a fixed period or for a contingent period, such as for the recipient's lifetime. Although annuities are most often associated with insurance companies and retirement programs, the payment of interest to a bondholder is also an example of an annuity. See also annuity certain, contingent annuity, deferred annuity, fixed annuity, joint and survivor annuity, refund annuity, straight life annuity, tax-sheltered annuity, variable annuity.