What is an annuity, and how does it differ from life insurance in its basic purpose?

An annuity is a contract between an individual and an insurer designed primarily to provide a stream of income, often during retirement. In a sense it is the opposite of life insurance: life insurance protects against the financial risk of dying too soon (leaving dependents without support), while an annuity protects against the risk of living too long and outliving one's savings, by providing income that can last for life. Annuities have accumulation and payout (annuitization) phases and come in fixed and variable forms. Understanding the income-providing purpose of annuities, and how it contrasts with life insurance, is standard retirement-topic content.