Immediate Payment Annuity
Definition
- An annuity contract where income payments are paid immediately after the annuity has been purchased, usually after a single upfront payment. Immediate payment annuities are generally purchased by senior citizens or those nearing retirement age because only a single payment is required for the annuity to be set up instead of a series of payments over a long period of time. Also known as an "immediate annuity" or an "income annuity."
Synonyms
payment without delay, dividend
Related Terms and Acronyms
- Annuity — Definition,
- A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
- A financial instrument that disperses a number of payments over a set period of time.
- Deferred Annuity — Definition,
- An annuity that makes payments to the annuitant at some date in future instead of immediately.
- Fixed Annuity — Definition,
- An annuity that makes fixed payments to the annuitant with guarantees for earnings and principal.
- Investment in the Contract — Definition,
- The principal that has been contributed to an annuity.
- Payout Phase — Definition,
- The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
- Single Premium Deferred Annuity (SPDA) — Acronym,
- A deferred annuity funded with a single payment.
- Split-Funded Annuity — Definition,
- Two annuities purchased together, one with a deferred payout and the other with an immediate payout.
- Wraparound Annuity — Definition,
- An annuity that allows the annuitant to control how funds in the annuity are invested.
