What is an Annuity?
An annuity is a contract with an insurance company whereby an income is provided in return for a capital sum paid to the provider. Annuities can be for life or for a certain period of time.
There are variations of annuities for example an enhanced annuity for people with ongoing health issues such as heart problems, smoking or being overweight can normally obtain higher annuity rates. The most commonly used – variable annuity which refers to an income drawdown plan with a guarantee underpinning the income.