"An income annuity is an agreement between you and an insurance company. In exchange for a payment, the insurance company is legally obligated to provide you with a regular, predictable, and reliable income stream.
It's basically a money for life** contract.
The reason people buy annuities is to provide a steady stream of income during retirement.
There are various types of annuities: immediate, fixed, variable, and index. Each has its own level of risk and payout potential."