Single Premium Deferred Annuity

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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).
References in periodicals archive ?
Those insurance companies specializing in commodity insurance products, such as single-premium deferred annuities and term life insurance would be weakened under proposed legislation allowing banks to directly or indirectly underwrite and sell insurance and would face rating downgrades in the new environment, Mark Puccia, a director in S&P's Insurance Rating Services, says.
62| Single-premium deferred annuities only allow for a single annuity payment.
Deferred annuities that provide for only a single, initial premium payment are often referred to as single-premium deferred annuities (SPDA).
Before 1988, Merrill Lynch Life had been involved with the sale of a nominal volume of ordinary life insurance, but beginning in 1989, it had a new corporate emphasis on the sale of single-premium deferred annuities and modified guarantee annuities.
Given this background, the valuation exercise herein will focus on single-premium deferred annuities offered by all nine insurers.

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