An annuity is a financial product often issued by certain financial institutions in order to accumulate value over the time it is effective, after the specified date the instrument becomes payable, the institution then pays it out over a period of years, thus guaranteeing a reliable source of steady income. Annuity contracts are often strictly regulated by different jurisdictions which obviously vary form state to state within the US, in other parts of the world the terms, conditions and benefits vary as well.

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