single-premium deferred annuity

Single-Premium Deferred Annuity (SPDA)

An IRA-like annuity into which an investor makes a lump-sum payment that is invested in either a fixed-return instrument or a variable-return portfolio, which is taxed only when distributions are taken.

Single Premium Deferred Annuity

An annuity purchased with a lump sum payment by the annuitant, who does not begin to receive payments until some future date. Like all deferred annuities, an SPDA has two phases, a savings phase and an income phase. The savings phase involves the annuity taking the lump sum payment and investing it on behalf of the annuitant. In the income phase, the annuitant receives payments. It is important to note that an SPDA, like all deferred annuities, is not taxed until the income phase begins. It also pays a death benefit to the survivor(s) of the annuitant. See also: IRA, 401(k).

single-premium deferred annuity

A deferred annuity purchase having one lump-sum premium payment. Single-premium deferred annuities offer the tax benefit of increasing in value tax-free until distribution takes place. Thus, an investor could pay a large single premium, have the investment build up free of taxes for a period of years, and then receive partially taxable annuity payments at retirement. A single-premium deferred annuity is more flexible than an individual retirement account, but unlike contributions by some individuals to an IRA, a premium to purchase a deferred annuity is not deductible for tax purposes. Compare periodic purchase deferred contract.
References in periodicals archive ?
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 company's new fixed annuity offerings -- Sterling Select, a single-premium deferred annuity (SPDA), and Sterling Select Plus, a flexible-premium deferred annuity -- are both offered by the 105-year-old Sun Life Insurance Company of America, which specializes in products for the retirement savings market.
In the near term, writers of single-premium deferred annuity and flexible-premium deferred annuity products are not expected to be significantly impacted, except perhaps structured settlement annuity writers.
Nationwide's InvestCare is a single-premium deferred annuity that provides lifelong long-term-care coverage.
Ford Life's phenomenal top line growth over the last three years comes primarily from the sale of single-premium deferred annuity contracts through a network of banks.
HOUSTON -- AIG American General announces the launch of AIG VisionMaximizer([TM]), a new index single-premium deferred annuity underwritten by American General Life Insurance Company (American General Life), a member company of American International Group, Inc.
American Enterprise Life, the issuer of the new Wells Fargo variable annuities, primarily markets single-premium deferred annuity contracts through financial institutions.
VisionAdvantage(SM) Index Single-premium Deferred Annuity Combines Duration Flexibility with Potential for Market Growth
Berkshire Hathaway Life Insurance Company of Nebraska has BHLN Direct, which provides quotes for a single-premium immediate annuity and a single-premium deferred annuity.
Events that have affected statutory results over the past several years included a coinsurance agreement with another life insurance carrier concerning a block of single-premium deferred annuity contracts that resulted in a favorable $22 million after-tax statutory gain; the strain associated with the company's recent growth in new life insurance production; and costs associated with the integration into the St.
Life 500, a single-premium deferred annuity with three interest-crediting options, is a rollover product designed for asset maximization.

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