Immediate Annuities

A popular type of annuity is the immediate annuity. Below is information on what an immediate annuity is and how an immediate annuity works.

What is an immediate annuity?

An immediate annuity allows the annuity investor to immediately tap into his or her annuity investments.

How does the immediate annuity work?

When investing in an immediate annuity, the annuity investor pay a lump sum of money to purchase an annuity. Instead of having to wait for a certain period of time like he or she would in other types of annuities, the annuity investor can immediate with draw some of the annuity investment in a stream of income payments.

How long will I receive payments from the immediate annuity?

You can choose whether to receive payments from an immediate annuity for:

• a guaranteed length of time,
• a lifetime, or
• a joint lifetime

The amount you will get periodically depends on the amount of your initial investment into the immediate annuity. The longer you choose to receive benefits, the smaller the amount of each payment. Also, since an immediate annuity has less time to accumulate, you will receive less periodic payments than if you were to purchase other types of annuity.

Will the payment of an immediate annuity be fixed?

You can choose to receive a fixed amount of payment from the immediate annuity or you can choose an amount that is tied to the performance of a sub account or sub portfolio of the immediate annuity.