Is an annuity worth more or less than a lump sum payment received now that would be equal to the sum of all the future annuity payments?

An annuity is typically worth less than a lump sum payment when considering the time value of money. This concept states that a dollar today is worth more than a dollar in the future due to its potential earning capacity. Therefore, the total present value of future annuity payments, when discounted back to the present, is usually lower than a lump sum payment received now.