Retirement
Annuity
Also known as: Pension Annuity, Retirement Annuity
Regular income payments from an insurance product, typically used for retirement income.
Detailed Explanation
An annuity is a financial product that provides regular income payments in exchange for a lump sum investment. In NPS context, 40% of the corpus must be used to purchase an annuity at retirement, which provides monthly income for life. Annuity rates depend on age, gender, and prevailing interest rates. The income is taxable at applicable slab rates. Various annuity options include life annuity, joint life annuity, and annuity with return of purchase price.