The dictionary definition is a contract issued by an insurance company that pays an annuitant an amount periodically for a certain time for the remainder of his life Common usage has expanded that definition to the point where you must dig deeper to understand the meaning Variations include a deferred annuity where you make payments into a fund over a period of years, known as a deferred annuity, (where tax on the fund's income is deferred), an immediate annuity (the original definition) or many other plans where a series of payments, either into or out of the fund, are involved