Annuity is derived from a Latin word
Annuity is derived from a Latin word -annus- which is a kind of investment medium that’s akin to the Certificate of Deposits that the banks offer. In very simple terms, annuity could be said to mean income. Taking it deeper, annuity can be defined as income from capital investment paid in a series of regular payments. More people buy annuity for the purpose of future retirement. But don’t forget that an annuity isn’t the same thing as a life insurance or a health insurance policy. Annuity is also not the same thing as a savings account and it can’t pass for a savings certificate. It’s not advisable at all for anyone to buy an annuity with the primary purpose of reaching short term monetary goals. On the positive side, buying annuities can seriously help you build up your wealth for the future. Lots of annuities are available but the 2 major types are fixed and variable. For the “fixed” type of annuity, don’t think “fixed” here refers to fixed interest; far from it, it only means that the premium that one earns gets an interest rate that’s guaranteed. Variable annuities, on the other hand, refer to premium that can go up or down, depending on certain trends that one has no direct control on. It’s very important to be properly informed about annuities, the various types, the right one for you and other relevant information, before you go about buying. Conclusively, you don’t have to make the annuity buying decision alone; talk to experts on annuity or anyone that has bought to know what you should do and what you shouldn’t do.
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