Annuity is almost like an opposite of insurance policies. In an insurance a person pays the amount and is paid back after the certain event takes place which is described in the terms may it be death or an accident after which the described amount can be paid.

            In an annuity however, the payment is made before like the insurance but the payback can start immediately or after a little while which is also pre-defined. And the payment can continue until the person’s death. This is basically kind of a precautionary measure by mostly retired people that they may live more than their saving amount. Annuity takes those savings and pays back in defined amount and value of installments up till the life of the person.

Although the companies offering annuities take the money at a single time and can start paying within a couple of months but some also can offer the payment in two or a little more payment as installments. But in this type, the payback may not start before 6 months after the last payment or somewhere around this period depending on the number of installments and the company’s policies regarding this issue.