deferred annuity


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Deferred Annuity

An annuity in which the annuitant does not begin to receive payments until some future date. A deferred annuity has two phases: a savings phase and an income phase. During the savings phase, the annuitant places money into the annuity, which invests it on behalf of the annuitant. In the income phase, the annuitant receives payments. It is important to note that a deferred annuity is not taxed until the income phase begins. It also pays a death benefit to the survivor(s) of the annuitant. Nearly all retirement plans are deferred annuities. See also: IRA, 401(k).

deferred annuity

An annuity that is not scheduled to begin payments until a given date. These annuities may be purchased with a single payment or, as is more often the case, with a series of periodic payments. Deferred annuities are most commonly purchased by individuals who want to make periodic payments during their working lives in order to receive monthly or annual income payments from the annuities during their retirement. Compare immediate annuity. See also periodic purchase deferred contract, single-premium deferred annuity.

Deferred annuity.

A deferred annuity contract allows you to accumulate tax-deferred earnings during the term of the contract and sometimes add assets to your contract over time. In contrast, an immediate annuity starts paying you income right after you buy.

Your deferred annuity earnings can be either fixed or variable, depending on the way your money is invested.

Deferred annuities are designed primarily as retirement savings accounts, so you may owe a penalty if you withdraw principal, earnings, or both before you reach age 59 1/2.

References in periodicals archive ?
The TAM highlights certain planning considerations pertinent to preserve the benefits of the deferred annuity investments.
If an annuitant dies before his or her deferred annuity matures or is annuitized, is the amount payable at the annuitant's death subject to income tax?
There is a California-only class that covered California residents at least 60 years old who purchased an American Equity deferred annuity between Jan.
If a deferred annuity client does not expect to use the annuity funds during his life, then consider talking with him about a more efficient way to pass that wealth to heirs.
While the variable annuity sold well, there was still some apprehension on how to mitigate the risk of potential and substantial losses to the annuity amongst those interested in purchasing a variable deferred annuity.
Now, consider a fixed deferred annuity owner whose policy has a one-year nursing home waiver of surrender charges.
Now, we have made this popular product even better by adding a choice of death benefits that truly puts the client in the driver's seat," said Michael Harrison, Vice President, Deferred Annuity Sales and Marketing, AIG American General.
The treatment which would apply to a deferred annuity, if it were not used to fund such a plan, is irrelevant when the annuity is so used.
a deferred annuity is one where annuity payments begin more than one year from the date of issue of the contract.
Available to those aged 60 to 85, the tool allows prospects to exchange their annuity for a single-premium deferred annuity with a seven- to 15-year payout; the payments then fund a universal life insurance policy with a guaranteed tax-free death benefit that will always be larger than the value of the original deferred annuity.
The tax-deferred variable annuities sold by defendants are virtually never suitable investments for tax-deferred retirement accounts because earnings on any such annuity placed in such a retirement plan are already tax-deferred, and purchase of a deferred annuity increases costs without any material, additional economic benefit.
Because of the significant differences among the many types of deferred annuity policies, generalizations about their effectiveness for spendthrift protection planning is difficult.