I come from a family of accountants. I have heard of annuities, although I have never really taken a close look at it. From what I understand, annuity in the United States is when a person pays an insurance company an amount of money in exchange for a fixed stream of income later on. Learn More - AnnuityAdvantage.com. Annuity has an added benefit of a being tax differed in some instances. This tax-differed benefit is mostly what people use annuity for. Annuities is ancient. Roman emperors are known to have utilized this form of financial tactics. Some get annuity for a fixed number of years, while others would get it for their life. I think the financial annuity holder make their money from the fees charged to the clients or from the interests the money accumulates. While stock market is in constant state of flux, overall, the market is going up.