annuity

Definition from Nolo’s Plain-English Law Dictionary

A purchased policy that pays a fixed amount of benefits every year -- although most annuities actually pay monthly -- for the life of the person who is entitled to those benefits. In a simple life annuity, when the person receiving the annuity dies, the benefits stop; there is no final lump sum payment and no provision to pay benefits to a spouse or other survivor. A continuous annuity pays monthly installments for the life of the retired worker, and also provides a smaller continuing annuity for the worker's spouse or other survivor after the worker's death. A joint and survivor annuity pays monthly benefits as long as the retired worker is alive, and then continues to pay the worker's spouse for life.

Definition provided by Nolo’s Plain-English Law Dictionary.