Single Premium Immediate Annuities

This type of annuity is very useful for many needs. I have some clients who have taken out this kind of plan who have been receiving payments now for over ten years. These payments have not been subject to market risks or adjustments. These payments have been made on time every month. The payments will last as long as my client lives.

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How this type of annuity works is the insurance company receives a single payment. In return the insurance company then begins to make payments on a regular basis to the annuitant. These payments are made on a predetermined frequency: monthly, quarterly, semi-annual or annual. The payments are set up to last the longer of the annuitant life or a given number of years. If the annuitant does not live to end of the minimum number of years then the balance is paid out to a named beneficiary. So no matter what happens the insurance company will pay out at least the amount of the original payment.


These kinds of arrangements are very useful in retirement planning to make sure you will have a guaranteed income for a guaranteed period of time. It is never recommended to put all of one’s money in this kind of plan but I have found it to provide my clients with great peace of mind knowing they will have a guaranteed income for life.