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What does the noun annuity mean?

single transaction

pension

lump sum

one-time payment

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A fixed stream of payments paid to someone over a predetermined period of time.

It is essentially a contract between an individual and a financial institution, in which the latter agrees to make regular payments to the individual, usually on a monthly or annual basis, in exchange for a lump sum payment or a series of payments made by the individual. Annuities are commonly used as a means of retirement income, providing a stable source of funds during one's golden years. They can also be structured to provide guaranteed income for a specified period of time, regardless of how long the individual lives. In this sense, annuities are an attractive option for individuals looking to ensure their financial security in the future.