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An annuity is a financial product that provides a guaranteed income stream to an individual in exchange for a lump sum, usually the value of a pension.
The amount of income provided by an annuity depends on a variety of factors, including the age and gender of the annuitant, the amount of the initial investment, and prevailing interest rates at the time of purchase. Annuities can also be structured to provide inflation-adjusted payments or to include a death benefit that pays out to the annuitant’s beneficiaries in the event of their death.
