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 ?
Variable immediate annuities differ from fixed immediate annuities in that the size of the payments is not guaranteed but varies according to investment performance of the "separate accounts.
Example 3: Dissatisfied with the rates offered on standard immediate annuities, Greg pays $100,000 to ABC but defers the start of cash flow for 10 years, until he is age 75.
A 2016 LIMRA report pegs New York Life's market share of single-premium immediate annuities (SPIAs) at 28 percent and deferred income annuities at 33 percent.
Immediate annuities provide your clients with a liquid stream of income.
Whether they are single premium immediate annuities, deferred income annuities or variable annuities with guaranteed living benefits, we are able to customize a message demonstrating how these products can be beneficial to a client planning for retirement.
This has had the effect of either causing annuity companies to exit the market for immediate annuities or to price their immediate annuity products with very low, unattractive returns, thus dampening sales of immediate annuities.
Many of these retirees need to establish a guaranteed income stream that immediate annuities can provide.
CUNA Mutual said it has been manufacturing annuities since the 1980s and the relationship with Transamerica will complement the company's existing "all-weather" portfolio of fixed, index and single premium immediate annuities.
In 2009, financial advisers that distribute products of the Guardian Life Insurance Company of America started asking about fixed immediate annuities.
An executive at a major distribution company recently told me he doesn't think fee-only financial advisors who recommend immediate annuities should be compensated for the value of the annuity because "they're not managing anything.