The most important concern for a retired person is regular income. An annuity product is a financial instrument that gives periodic income for the rest of your life. In India, it is sold by life insurance companies. These are products that help you accumulate a corpus with which you can buy an annuity later, or if you have ready corpus, you can buy an annuity immediately. These are called deferred and immediate annuities, respectively.
Types of annuity
A deferred annuity requires you to first build a corpus, and then use it to buy an annuity. Pension plans offered by life insurance companies, and even the National Pension System (NPS), come in this category because they first help you build a corpus and on retirement, require you to buy an annuity product with a part of that corpus.
