I am getting an inheritance in the form of an annuity. Am I better off with the annuity or a lump sum. Can I change it to a lump sum? Can I ask for a once a year instead of a monthly annuity? Can I ask for an initial amount and the rest in annuity? What is the best way to handle this?
Without knowing a lot more about your circumstances the first question is really rather hard to answer as one can make a case for each:
Want an income stream for a defined time period rather than a larger lump that may have greater tax implications as if the annuity is large enough this could have a sizable portion paid to the IRS as income that may be avoided by taking an amount each year instead. The risk here is what the company will pay out, what will inflation be and what tax implications could be down the road.
For Lump Sum
Want all the cash in a current value. Possibly could have large debts that would be wiped out in this case. Could also have fears about the insurance company being around to keep paying the annuity as some companies can go under.
As for the other questions
The other questions are ones to ask the insurance company as there could be terms for taking an annuity initially and then converting to a lump sum or setting the terms on how often the annuity pays out. My advice would be to consider the size of the annuity and how much would a tax specialist cost to get professional advice for your situation that doesn't belong in a general answer.
JB gave a good general answer of what an annuity is. The problem is that there are so many different types of annuities that each one has its own set of rules. The only real answer is for you to check with the agent of the company providing the annuity.