Annuities

According to the National Association of Insurance Commissioners Buyer's Guide, this is the definition of an annuity.

"An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often bought for future retirement income. Only an annuity can pay an income that can be guaranteed to last as long as you live.
An annuity is neither a life insurance nor a health insurance policy. It's not a savings account or a savings certificate. You shouldn't buy an annuity to reach short-term financial goals."

Today, annuities also provide a way to accumulate money on a tax deferred basis through a fixed annuity or a fixed indexed annuity.  A fixed annuity provides a guaranteed rate for some fixed period of time, similar to a CD; whereas, a fixed indexed annuity provides that when the market is up, you make money, and when it is down, you do not lose.

Click on the arrow below - It will take you to a video which will walk you through how an annuity actually works: