Though increasingly popular among today's aging Baby Boomers and members of the Mature or "Senior" markets (more about them both later), annuities can be traced back to ancient Greece. The term "annuity" comes from the Greek word "annus" – or "year" – and refers to annual income payments. Similarly, in ancient Rome citizens would make one-time payments to a contract called "annua" in exchange for lifetime payments made once a year.

In 17th century Europe, annuities were used as fundraising devices by governments to finance their ongoing wars with neighboring nations. These governments would offer "tontines," which promised payments into the future to those who bought shares.

In the 18th century, annuities were introduced to North America, with private insurance companies selling insurance and annuity contracts to individuals wanting to avoid outliving their resources.

In 1759, a Pennsylvania company was formed to benefit Presbyterian ministers and their families. The ministers would contribute to a fund, in exchange for lifetime payments. In 1912, the Pennsylvania Company for Insurance on Lives and Granting Annuities became the first American company to offer annuities to the public.