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Insurance vocabulary · Life & Health Insurance

Annuity

Meaning in insurance, with examples

/əˈnuːəti/nounAdvanced term

In insurance, annuity means: A financial product, often sold by life insurers, that turns a lump sum into regular payments, for example every month for the rest of a person's life.

In Turkish: anüite, düzenli gelir ödemesi, ömür boyu gelir sigortası

How it is used

Common in retirement planning in the UK and US. People buy an annuity with their pension savings, and the provider pays a monthly or yearly income. Types include lifetime, fixed-term and joint annuities.

Example sentences

  1. At 65, she used part of her pension savings to buy a lifetime annuity.

  2. Annuity rates improved when interest rates went up.

Common collocations

  • buy an annuity
  • lifetime annuity
  • annuity income
  • annuity rate
  • life insuranceInsurance that pays a sum of money to the named beneficiaries when the insured person dies, and in some products also builds up savings.
  • surrender valueThe amount of money a policyholder receives if they cancel a savings-type life policy before it ends.
  • whole life insuranceLife insurance that lasts for the person's whole life as long as premiums are paid, and usually builds up a cash value over time.
  • actuaryA specialist who uses statistics and mathematics to measure risk, calculate premiums and estimate how much money an insurer must keep for future claims.

More terms: Life & Health Insurance

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This page explains English vocabulary for learners. It is not financial advice.