Single Premium Immediate Annuity Information

A single premium immediate annuity is a type of insurance policy that will begin to pay the purchaser a specific amount each month starting 30 days after its initial purchase. Payment time can be deferred to a later date if requested, but the point of choosing an immediate annuity is to receive the benefits immediately.

Why select an immediate annuity over different types of annuities?

There are a few reasons to select an immediate annuity as opposed to other annuities. Immediate annuities can be used right away. If you find yourself suddenly retired or unemployed, you can invest into this type of product and enjoy a lifetime of payments. If you select lifetime benefits, these payments can never be outlived. You will receive a payout until you pass away. It is a very simplified choice of investments. The purchaser does not have to sweat changes in the market, they will receive their guaranteed payment no matter how the market changes.

Are there any other benefits to this type of investment product?

Immediate annuities generate a higher return rate then other investment products like Certificates of deposit or T-Bills. There are also several tax advantages to purchasing and using this type of annuity. Careful financial planning with the annuity provider will help ensure that you suffer the lowest tax burden possible.

What else should I know about annuities?

Annuities are an insurance product and can only be purchased through an insurance agent. These policies are a form of life insurance and fall under different financial guidelines and rules. Because the life insurance company is making investments on your behalf, there is a maintenance fee for owning an annuity. However, this small fee does not defer from the importance of this type of investment. Since these are a type of insurance policy and not an investment account, annuities of any type are not FDIC insured.

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