What Are Annuities And Why Is It Necessary? 
An annuity is a contract that states , simply , that in exchange for a sum of money , the company will pay regular monthly payments for as long as you live . Since those provisions dont meet everyones requirements there are a variety of other optional payment plans to limit the payout period or provide payments to more than one survivor . There are two major types of annuities , immediate , where the benefits commence within one year and deferred which allows for multiple deposits over a period of time . 