noun \ə-ˈnü-ə-tē, -ˈnyü-\

: a fixed amount of money that is paid to someone each year

: an insurance policy or an investment that pays someone a fixed amount of money each year

plural an·nu·ities

Full Definition of ANNUITY

:  a sum of money payable yearly or at other regular intervals
:  the right to receive an annuity
:  a contract or agreement providing for the payment of an annuity

Examples of ANNUITY

  1. Part of her retirement income will come from an annuity.
  2. <his grandfather's will provided him with an annuity of $5,000 a year to be used for school expenses>

Origin of ANNUITY

Middle English annuite, from Anglo-French annuité, from Medieval Latin annuitat-, annuitas, from Latin annuus yearly
First Known Use: 15th century

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite


noun    (Concise Encyclopedia)

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 such as pension plans or life insurance depend on shared risk. Everyone pays in a fixed amount until the annuity begins; some will not live long enough to receive back all the money they have paid, while others will live long enough to collect more than they have paid.


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