Ways An Annuity Can Earn Interest
Learn about fixed rate and variable annuities.
An annuity is a contract with a life insurance company, charity, or trustee makes a series of income payments to you at regular intervals in return for a premium or premiums that you have paid. Annuities are an investment tool and can provide a fixed or variable rate of return. They can also start paying out immediately or at a later date.
Annuities are most often bought for future retirement income. An annuity can pay an income that can be guaranteed to last as long as you live.
An annuity is neither a life insurance policy nor a health insurance policy. It’s not a savings account or a savings certificate, and you shouldn’t buy an annuity to reach short-term financial goals.
Your value in an annuity contract is the amount in premiums you have paid, minus any applicable charges, plus any interest your premiums have earned.