---
title: "What Is Annuity? Definition | Epic Life Glossary"
description: "An annuity is a contract with an insurance company in which you pay a lump sum or a series of payments. In return, the insurer agrees to make payments..."
url: https://epicline.preview.multisites.ai/glossary/annuity
publisher: Epic Life Group
apply: https://epicline.preview.multisites.ai/apply
quote: https://epicline.preview.multisites.ai/get-a-quote
---

Annuity terms

# Annuity

An annuity is a contract with an insurance company in which you pay a lump sum or a series of payments. In return, the insurer agrees to make payments to you, either right away or at a future date.

## Why it matters

People use annuities to save for retirement or to turn savings into steady income. The main types are fixed, indexed, and variable. Fixed and indexed annuities are insurance products. Variable annuities are securities with investment risk. Annuities often include surrender charges for early withdrawals and may carry fees. Guarantees depend on the claims-paying ability of the insurer. Features and rules vary by carrier and state, so compare contracts and read the disclosure carefully.

Source: [investor.gov](https://www.investor.gov/introduction-investing/investing-basics/glossary/annuity)

[Read next, for familiesAnnuities explained: fixed, fixed-index, MYGA, income riders and surrender charges](https://epicline.preview.multisites.ai/annuities)

## Where we use this term

-   [Fixed vs fixed index annuity: how do they work and who do they fit?](https://epicline.preview.multisites.ai/guides/fixed-vs-fixed-index-annuity)
-   [IMO vs FMO vs MGA: which structure fits an independent agent?](https://epicline.preview.multisites.ai/guides/imo-vs-fmo-vs-mga)
-   [How to get a multi-state life insurance license: resident first, then nonresident](https://epicline.preview.multisites.ai/guides/multi-state-life-insurance-license)
-   [Which carriers can Epic Life agents sell for?](https://epicline.preview.multisites.ai/careers/carriers)

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