annuity

noun
an·​nu·​i·​ty | \ ə-ˈnü-ə-tē How to pronounce annuity (audio) , -ˈnyü- \
plural annuities

Definition of annuity

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

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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.

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 In this case, the annuity option would begin with a payment of $15.8 million and end with $65 million before tax, and the lump sum would amount to $776.6 million before tax. Miriam Marini, Detroit Free Press, "$1B Mega Millions jackpot winner bought ticket at Kroger's Novi location," 25 Jan. 2021 The jackpot figures refer to amounts if a winner opts for an annuity, paid in 30 annual installments. Ed White, Chron, "Someone just won Mega Millions' $1.05 billion lottery jackpot," 23 Jan. 2021 The jackpot figures refer to amounts if a winner opts for an annuity, paid in 30 annual installments. BostonGlobe.com, "One winner of Mega Millions $1 billion prize; third largest ever in US," 23 Jan. 2021 Both prizes are the totals if a winner choses the annuity option, paid over 30 years, but cash prizes are lower than the current totals. NBC News, "Powerball jackpot increases to $730 million, Mega Millions rises to $850 million," 17 Jan. 2021 Retirees already participate in an annuity — Social Security. Chris Farrell, Star Tribune, "Will your savings last in retirement? This approach may help," 16 Jan. 2021 In 1998, a settlement between tobacco companies and most states limited marketing and required the firms to pay an annuity to states, forever. Mike Catalini, Star Tribune, "EXPLAINER: Why expansion of vaccine to smokers caused a stir," 15 Jan. 2021 The jackpots promoted by both lotteries are the prize winnings of winners who take an annuity option, in which prizes are paid out over 30 years. Elinor Aspegren, USA TODAY, "Mega Millions ($750M), Powerball ($640M) jackpots rank among top 10 in US lottery history this weekend. Here's how to play.," 15 Jan. 2021 Watkins had the option of taking the $1 million prize as an annuity of 20 payments of $50,000 a year or a lump sum of $600,000. Christopher Brito, CBS News, "Nurse who works in COVID-19 unit wins $1 million jackpot," 14 Jan. 2021

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'annuity.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of annuity

15th century, in the meaning defined at sense 1

History and Etymology for annuity

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

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Time Traveler for annuity

Time Traveler

The first known use of annuity was in the 15th century

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Statistics for annuity

Last Updated

7 Feb 2021

Cite this Entry

“Annuity.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/annuity. Accessed 1 Mar. 2021.

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More Definitions for annuity

annuity

noun

English Language Learners Definition of annuity

: 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

annuity

noun
an·​nu·​ity | \ ə-ˈnü-ə-tē How to pronounce annuity (audio) , -ˈnyü- \
plural annuities

Kids Definition of annuity

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

annuity

noun
an·​nu·​ity | \ ə-ˈnü-ə-tē, -ˈnyü- How to pronounce annuity (audio) \
plural annuities

Legal Definition of annuity

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

History and Etymology for annuity

Medieval Latin annuitas, from Latin annuus yearly

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