An annuity plan is essentially a?

An annuity plan is fundamentally a purchase of income, designed to provide a stream of payments to an individual at regular intervals over a specified period or for the rest of their life. The primary function of an annuity is to convert a lump sum of money into a predictable income source, which can be particularly beneficial during retirement.

When individuals contribute to an annuity, they are essentially making an investment that will yield returns in the form of consistent payments, often after reaching retirement age or a defined period. This structured payout can help ensure financial stability and help manage expenses over time.

The other options do not accurately reflect the essence of an annuity plan. While life insurance policies provide a death benefit and some may offer living benefits, they are not directly related to income generation in the same way annuities are. Waiver of premium benefits is an added feature in life insurance that allows policyholders to maintain coverage in case they become disabled; it does not pertain to the income generation aspect of annuities. Similarly, an endowment plan serves a different purpose, focusing on providing a lump sum at a specified time, usually when the insured reaches a certain age, rather than providing ongoing income.