Annuities are products which you buy as a form of income. One of the most common forms of annuity would be a retirement pension. As a potential retiree, you pay into a pension fund and this in turn gets invested. Once you stop working, your pension or ‘annuity’ starts to payout a specified income.
Annuities are more than long-term retirement products. They are also contracts. With every annuity you sign up for, you enter into a contract with an insurance company. This contract guarantees that you will receive future income until you die.