Annuity
✓ Last verified 14 Sep 2026
The short version
An annuity converts a lump sum into a guaranteed regular income stream, typically for life - the mechanism NPS uses to turn part of your retirement corpus into ongoing pension payments rather than a one-time payout.
Rather than receiving your retirement corpus as one lump sum (with the risk of mismanaging or outliving it), an annuity guarantees a regular payout - commonly monthly - for the rest of your life, or a defined period, in exchange for the lump sum used to purchase it. See our article on choosing an annuity provider and option for the meaningful choices within this - single vs. joint-life, with or without return of purchase price - since these materially change both the payout amount and what happens after death.
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