immediate annuity


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Immediate Annuity

An annuity that the annuitant purchases with a lump sum payment and from which he/she begins to receive payments immediately. An annuitant often buys an immediate annuity after he/she has reached retirement age and wishes to receive his/her savings or other money in an organized manner. An immediate annuity may either be fixed or variable; that is, payments may remain constant throughout the life of the annuity (or the annuitant's natural life) or they may change according to the performance of the investments made by the lump sum payment. See also: Deferred annuity.

immediate annuity

An annuity that is purchased with a lump sum and that begins making payments one period after the purchase. Immediate annuities are most commonly purchased by people who have accumulated a sum of money and are ready for retirement. Compare deferred annuity.

Immediate annuity.

You buy an immediate annuity contract with a lump-sum purchase. You begin receiving income from the annuity either right away or within 13 months.

A fixed immediate annuity guarantees the amount of income you'll receive in each payment, based on the claims paying ability of the insurance company selling the contract.

A variable immediate annuity pays income based on the performance of the annuity funds, or subaccounts, you select from those available through the contract.

Immediate annuities appeal to people who want to convert a sum of money to a source of regular income, either for themselves or for another person. One way they're frequently used is as a source of retirement income.

References in periodicals archive ?
Bajaj Allianz Pension Guarantee, the immediate annuity plan offered by Bajaj Allianz Life Insurance, has 37 as the minimum entry age.
We all know the primary reason for an agent to suggest this approach is that the commission for selling a deferred annuity is much higher than for an immediate annuity.
If the annuity has been purchased with after-tax money an immediate annuity pays back both principal and tax-deferred earnings, with a portion of each payment considered to be income and a portion considered to be tax-free return of principal.
Buyers relinquish their rights to a lump sum when they purchase an immediate annuity in exchange for guaranteed income payments from the insurance company.
Rituraj Bhattacharya, head, product development, Bajaj Allianz Life Insurance, says, " The new pension product guidelines have made it mandatory for companies to bridge the gap between deferred and immediate annuity plans wherein the insured will have to compulsorily buy immediate annuity from the same insurer on attaining the vesting age.
As expected, the price of an immediate annuity [GAMMA].
While the insurance company assumes the risks associated with a gift annuity program via the immediate annuity, the obligation to pay the donor remains that of the school.
deferred: An immediate annuity provides payment of benefits immediately on funding.
Let's say that she has $750,000 in assets and her financial advisor recommends that put $75,000 in an immediate annuity.
TM] is a service through which financial advisors can obtain comparative pricing and data about fixed deferred and immediate annuity products from across the industry.
Kotak Mahindra Old Mutual Life Insurance (Kotak Life Insurance) has launched Kotak e-Lifetime Income Plan, an immediate annuity product.