Home | Finance | Things You Need To Know About Immediate Annuity

Things you need to know about Immediate Annuity

An immediate annuity is an important term to understand before you set up an insurance contract. The term means that you will start receiving income payment from the time of setting up an insurance contract. It is basically a contract that allows you to save money and then generate income out of the amount accumulated.

Things you need to know about Immediate Annuity
It is like a savings account where you put your money and earn interest on the same. In case of an immediate annuity, you make income immediately after setting it up.

How does it work?
There are two types of annuities you may choose from. One is a single-premium immediate annuity and the other one is a deferred annuity. In the case of a single-premium annuity, you are expected to deposit a certain sum of cash with the insurance company and the company will make timely and consistent payments to you. You may opt for monthly or annual payments. It is important to keep in mind that once you sign this contract and take income, you cannot go back. It is expensive to get out of this contract. As per the contract, the insurance company will continue to make payments to you. As against this, deferred annuity only holds your money and does not pay you any income immediately. The funds get accumulated over a period of time, which you may withdraw in lump sums later.

What will you receive?
The amount of income you receive depends on the amount of money you contribute. If you contribute more, you get more. There are different payment options you need to choose from. You may ask for guaranteed payments for the rest of your life, or you may choose to receive income for the next 10 or 20 years. Your beneficiaries receive the money if you do not survive. You may also select an option where the payments are made for as long as your spouse survives. In short, every insurance company will have a different payment option for you to choose from.

If you want consistent payments for the rest of your life, it is best to choose the first option. Once you make an investment, you have nothing to worry about. You will immediately start receiving income on the amount invested. A lot of people opt for a monthly payment after their retirement. This allows them to enjoy the retirement without any financial stress. Through immediate annuity, you may also ensure the financial security of your spouse and children in your absence.

Disclaimer:
The information available on this website is a compilation of research, available data, expert advice, and statistics. However, the information in the articles may vary depending on what specific individuals or financial institutions will have to offer. The information on the website may not remain relevant due to changing financial scenarios; and so, we would like to inform readers that we are not accountable for varying opinions or inaccuracies. The ideas and suggestions covered on the website are solely those of the website teams, and it is recommended that advice from a financial professional be considered before making any decisions.

Recent Articles

All You Need To Know About Bleeding Gums
Health & Wellness

All You Need To Know About Bleeding Gums

Understanding The Stages A Congestive Heart Failure
Health & Wellness

Understanding The Stages A Congestive Heart Failure

Deep Vein Thrombosis – Diagnosis And Treatment
Health & Wellness

Deep Vein Thrombosis – Diagnosis And Treatment

The Causes And Symptoms Of Carcinoid Neuroendocrine Tumors
Health & Wellness

The Causes And Symptoms Of Carcinoid Neuroendocrine Tumors

An Overview Of Cla Safflower Oil
Health & Wellness

An Overview Of Cla Safflower Oil

Top 10 Health Benefits Of Safflower Oil
Health & Wellness

Top 10 Health Benefits Of Safflower Oil