Annuity is nothing but a type of insurance deal which paybacks a certain amount of money back to the investor after a fixed amount of time. These are just like the investment certificates provided by the banks. There are various types of annuities available in the market. Certain annuities provide you with fixed annual rate while some of them provide you variable rate of interest. When you invest in annuities then your total amount keeps on increasing according to the rate of interest you have invested in.
There are annuities available in the market which pays you back the amount throughout your lifetime. These are also known as pensions. There are certain annuities that provide you death benefits. By death benefits, we mean that it will act similar to the insurance. But as it is every good thing comes along with a defect, so is it with annuity. Because of its defects it is advisable to invest in it after you have secured your retirement.