An annuity is a financial product that provides a steady stream of income, typically for retirement, in exchange for a lump-sum payment or series of payments to an insurance company or financial institution. It is designed to ensure regular, predictable income over a specified period or for the rest of the investor’s life. Annuities can be immediate (payments start right away) or deferred (payments begin later) and may offer fixed or variable returns depending on the plan. They help individuals plan for long-term financial security, supplement retirement income, and reduce the risk of outliving their savings.