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An annuity is a contract that an individual or couple enters into with an insurance company that pays them a certain amount, either annually or in a lump sum, based on their initial investment. People will often purchase an annuity because it can often guarantee them a certain amount of income, even after they have retired or stopped working. There are two types of annuities. An annual annuity will provide you with a yearly income strain, whereas a differed annuity will pay you a lump sum after the annuity has terminated.
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