What is a contract that systematically liquidates accumulated assets through periodic payments called?

An annuity is a financial product that systematically liquidates accumulated assets through a series of periodic payments. This means that once an individual invests a sum of money into an annuity, it generates regular income, which can be paid out monthly, quarterly, or annually. Annuities are often used as a means of providing retirement income, allowing individuals to convert a lump sum of money into a steady stream of payments over time.

The structure of an annuity typically involves two phases: the accumulation phase, where the investment grows, and the distribution phase, where periodic payments are made to the annuitant. This characteristic makes annuities particularly beneficial for individuals looking for a reliable source of income during retirement.

The other options refer to different types of financial products or agreements but do not specifically embody the concept of liquidating assets through periodic payments. Indemnity contracts focus on compensating losses rather than providing regular income, investment contracts involve the growth of assets without guaranteed periodic payments, and endowments typically provide a lump-sum payout at a particular time rather than ongoing periodic payments.