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,
- 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