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Immediate Annuity

This annuity is great if you have received a windfall that you need to last a lifetime. An immediate annuity is structured so that you start receiving income as soon as you purchase the contract. This type of annuity contract does not have an interest deferral phase.

Actuarial tables--which are sophisticated forms of life expectancy calculations--are used to determine the amount the insurance company will pay for either:

  • A specified time period--known as “Period Certain,” or

  • One of several life contingency options based on who is to be covered--you or both you and your spouse.

You pay for an immediate annuity with a single lump sum--they generally do not allow subsequent contributions. The downside to an immediate annuity is that it does not allow any flexibility once distribution payments have begun--you will continue to receive the same amount of money over the prescribed time period.

 Immediate Annuity

 Fixed Annuity


 Variable Annuity


 Variable Annuity Advantages & Disadvantages



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