An Immediate Annuity is purchased with a premium up front paid to an insurance company in exchange for payments made to the purchaser (or designated payee) by the insurance company. Payments can be made to you in a flexible manner. You may choose monthly or annual payments.
Immediate Annuities are purchased for many reasons:
- retirement planning to avoid running out of money in later life
- preparing for future payments of life insurance or long term care premiums
- gifts with payments spread out to avoid lump-sum gifts
- asset positioning to qualify for government benefits
- personal service contracts
Immediate Annuities can be purchased in many different forms to suit your individual needs:
- Payments for Life. This option insures income for you for your entire lifetime, regardless of how long you live.
- Payments for Life with a guaranteed number of payments. This option will make payments to you for your lifetime. It also allows you to select a guaranteed number of payments that will be paid to you or your beneficiary(s) if you pass before the guaranteed number of payments has been made.
- Payments for a Fixed Period. This option lets you select the number of payments you want to receive in exchange for your premium. If you pass before all payments have been made, the remaining payments will be made to your beneficiary(s).
- Joint Payments for Life. This option allows for you and your spouse to be paid for your lifetime even if one dies before the other. There are various choices for the percentage of the payments made after the first spouse passes.
- Joint Payments for Life with a guaranteed number of payments. This option allows payments for spouses for their entire lifetime with the added benefit that a guaranteed number of payments will be paid to the purchasers. In the event both spouses pass prematurely before all the guaranteed payments have been made, the remaining guaranteed payments will be paid to the beneficiary(s).
- Joint Payments for a Fixed Period. You and your spouse will receive payments for a guaranteed fixed period. If you both pass before all payments have been made, the remaining guaranteed payments will be made to your beneficiary(s).