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
dividend, payment without delay

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.
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