How Do Annuities Work? 
In an annuity the company exchanges a sum of money for a lifetime of income . This basic contract is called a single premium immediate annuity . Every other annuity is a modification of this plan . Deferred annuities allow you to contribute towards an annuity over a period of years . During the accumulation phase , increases in value are not taxed until the contract starts to make payments . Every objection about annuities has been met with a new form of annuity until there is quite possibly something for everyone . 