The immediate annuity is an excellent option for investors seeking the security and convenience of periodic income payments. Most often immediate annuities are purchased by retired individuals who no longer work or those who require additional income to supplement part-time employment.
Immediate annuities were developed to provide guaranteed and convenient periodic income payments. Immediate annuities are funded with a single payment because income payments begin shortly after the contract is purchased. This lump-sum payment guarantees periodic income payments over a pre-determined period of time.
Fixed annuity owners may choose one of the following payout options:
- Period Certain: guaranteed income over a period ranging from five to 30 years.
- Life Only: guaranteed income for the life of the annuitant.
- Life with a Period Certain: guaranteed income for the life of the annuitant and for a period ranging from five to 30 years.
- Joint and Survivor: guaranteed income covering two or more lives (usually the investor and spouse) and continuing in-force as long as any one of the annuitants survive.
