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.