Annuity / Annuities

Immediate Annuity

What is an Immediate Annuity?

Like all annuities, an immediate annuity is an agreement between you and a life insurance company. In this agreement, you pay the life insurance company a sum of money. In return, the life insurance company pays you a series of payments.

There is one main difference between an immediate annuity and a deferred annuity. With an immediate annuity, the payments from the life insurance company begin immediately.

Immediate Annuity Payment Schedule

Immediate annuities create a stream of income that comes to you in the form of payments from the life insurance company. These payments can last for a fixed period or for your entire lifetime.

A fixed period immediate annuity is when the life insurance company pays you for a specified period of time. The payments continue for the period specified whether you are alive to receive the payments or not.

A lifetime immediate annuity is when the life insurance company continues to pay you for as long as you live.

It is also possible to add a guaranteed period to your lifetime annuity. This allows your beneficiaries to continue receiving payments even if you don't outlive the guaranteed period.

Single Premium Immediate Annuity (SPIA)

The most common immediate annuity purchased today is the single premium immediate annuity, also known as a SPIA.

A single premium immediate annuity is one in which payments from the life insurance company start right after your first (and only) premium payment.

Learn More:
Annuity Explanations