Answer: Option ( B ). A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time.
Explanation: An annuity is a contract between an individual and an insurance company in which you make a lump sum payment or series of payments and in return receive regular disbursements at some point in the future.it is a series of payments made at intervals. It can also be defined as a contract between you and an insurance company that requires the insurer to make installmental payments to you or come as one lump sum.
Annuities are bought by people who intend to “insure” their retirement and to receive periodic payments once they no longer receive a salary. The two phases to annuities are the accumulation phase and the payout phase.
