What Is The Difference Between Annuities And Mutual Funds? 
An annuity is a contract with an insurance company . The main purpose of the contract is to provide a lifetime income . In order to meet this objective the insurance company puts money into one of several funds depending upon the desires of the customer . Some of these funds allow the customer to select individual investment sub-accounts . These sub-accounts look a lot like mutual funds however ; they are agreements with the insurance company . Mutual funds are managed funds that invest in securities or cash . 