annuity

noun

an·​nu·​i·​ty ə-ˈnü-ə-tē How to pronounce annuity (audio)
-ˈnyü-
plural annuities
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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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 The annuity is paid out as one immediate payment followed by 29 annual payments, according to the Mega Millions website. Tanya Wildt, Detroit Free Press, 19 July 2024 Women would do well to load up on annuities, retirement experts say, as a hedge against outliving their savings. Daniel De Visé, USA TODAY, 17 July 2024 Funds pool the relatively small-dollar investments from millions of people to make these purchases More about investing:When combining annuities and mutual funds makes sense, or not. Russ Wiles, The Arizona Republic, 23 June 2024 The finance news site also reported that First Lady Jill Biden receives a $250,000 pension and an annuity in addition to some cash. Lea Veloso, StyleCaster, 5 July 2024 See all Example Sentences for annuity 

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'annuity.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

Etymology

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

First Known Use

15th century, in the meaning defined at sense 1

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

Dictionary Entries Near annuity

Cite this Entry

“Annuity.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/annuity. Accessed 25 Jul. 2024.

Kids Definition

annuity

noun
an·​nu·​ity ə-ˈn(y)ü-ət-ē How to pronounce annuity (audio)
plural annuities
1
: a sum of money paid at regular intervals
2
: an insurance contract providing for the payment of an annuity

Legal Definition

annuity

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

Medieval Latin annuitas, from Latin annuus yearly

More from Merriam-Webster on annuity

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