Picture yourself planting a tree. After years of tender care, the tree now produces fruit regularly. In the same way, an annuity plan provides you with a consistent income stream for the rest of your life in return for a lumpsum payment or a series of instalments.
Simply put, an annuity is a financial plan where you make regular payments and receive a predetermined amount of money either immediately or in the future on a yearly, half-yearly, quarterly, or monthly basis.