immediate annuity

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Related to Immediate Annuities: Deferred annuities, Retirement Annuities

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 ?
Why aren't more retirement plan assets being roiled over into immediate annuities? This may be due, in part, to the favorable tax treatment of payouts from SPIAs purchased with nonqualified funds.
Although this does not provide as high of an annual payment as immediate annuities (typically equal to 7% to 10% of the deposit), it provides for ongoing upside participation in the separate account options.
Give examples--traditional fixed annuities, fixed index annuities, immediate annuities, variable deferred annuities with death benefit and living benefit guarantees, long permanent life policies, etc.
IMMEDIATE ANNUITIES (IAs) are a small segment of the overall fixed annuity (FA) market, pulling in an estimated $6.14 billion in 2006 sales in the United States--just 8.7% of the $70.9 billion estimated overall market, according to Beacon Research data.
They said that in 1998, about half of all newly purchased individual immediate annuities were the funding vehicles for structured-settlement cases, which result from awards in legal cases and, therefore, do not represent income to retirees.
The important thing about immediate annuities is that sales are rising, seemingly without regard to interest rate or stock market movements, Alexander says.
So, some do have a hard time thinking about lifetime immediate annuities or locking up their money in lifetime income plans since they are "at such a young age."
Some of the innovation will come in the markets for single-premium immediate annuities and other types of income annuities, he said.
Many products are sold as annuities these days, including life immediate annuities, which focus on managing longevity risk.
It provides fixed indexed annuities, fixed rate annuities, single premium immediate annuities and indexed universal life insurance policies and is a subsidiary of HRG Group Inc.
Immediate Annuities: These annuities are designed to guarantee owners a predetermined income stream on a monthly, quarterly, semiannual or annual basis in exchange for a lump sum.
Sales of income annuities -- single premium immediate annuities and deferred income annuities -- are up 22 percent and fixed deferred annuities are up 12 percent compared to the same period last year.