Life Insurance companies sell annuities in addition to issuing life assurance plans. Annuity, a form of pension, which is taken out by a person who wants to get a regular income after his retirement or in his old age and for this purpose, he pays premium during his life time in instalments or in one large amount. Annuity is paid so long as the annuitant survives and nothing is paid thereafter. Let us discuss what the Annuity exactly is. Annuity is a form of pension, whereby in return for a certain sum of money the insurer agrees to pay the annuitant an annual amount for a specified period or for the remainder of the annuitant’s life.
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