Which of the following best defines an annuity?

An annuity is best defined as an investment product that can be categorized as either fixed or variable. This financial product is designed to provide a steady income stream, typically used for retirement purposes. In a fixed annuity, the insurer guarantees a specific rate of return, whereas, in a variable annuity, the return can fluctuate based on the performance of underlying investments. This flexibility allows individuals to choose an annuity based on their risk tolerance and income needs.

While other options mention insurance or savings plans, they do not encompass the full definition and function of annuities as investment products that can vary in structure and risk.