Annuity
Definition
A financial product sold by insurance companies that provides a series of regular payments in exchange for an initial lump sum investment. Annuities are commonly used for retirement income. Types include immediate annuity (payments start right away) and deferred annuity (payments start at a future date).
Example
A retiree investing Rs 30 lakh in an immediate annuity at age 60 might receive approximately Rs 18,000-22,000 per month for life, depending on the annuity rate and options chosen.
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