Single Premium Immediate Annuity
A fixed single premium immediate annuity is designed to provide guaranteed, periodic income payments over the lifetime of one or two individuals, such as a husband and wife or parent and child. Initial payments start within 13 months of the contract purchase date. The contract may be purchased with funds from an IRA, tax-sheltered annuity, 401(k), pension or profit sharing plan, or from some non-qualified source of funds, such as a bank account or the proceeds from a mutual fund that has been cashed out.
The payment options available offer a great deal of flexibility in income planning. Payments may be made on a monthly, quarterly, semi-annual or annual basis. Single-life or joint survivor life payments may be level or may include an annual cost-of-living adjustment of from 1% to 6%. In addition, joint survivor life payments may be structured to be level over the entire lifetime payment period, or some other period. Payments may continue or be reduced to 75%, 67% or 50% of the initial payment amount to the survivor when one or a specific Annuitant dies.
Sometimes proper financial planning suggests purchase of a single premium immediate annuity to provide income for life only “straight life”. In this case, when the last annuitant dies, payments stop entirely, even if death occurs shortly after the payments begin or even if no payments have started. Other times, proper planning suggests lifetime income payments combined with the guarantee of a minimum number of payments to either an annuitant or their designated beneficiary. Guaranteed payment periods may run for 5, 10, 15, 20 or more years. Alternatively, an immediate annuity may be purchased to guarantee payments in an amount equal to at least the premium cost used to initially purchase the annuity. Annuity payments stop after that amount has been recouped and when the Annuitant dies. Contracts are neither revocable nor commutable back to a lump sum.
* Product features may vary.
Currently available in the following states
* AK , AL , AR , AZ , CA , CO , CT , DC , DE , FL , GA , HI , IA , ID , IL , IN , KS , KY , LA , MA , MD , ME , MI , MN , MO , MS , MT , NC , ND , NE , NJ , NM , NV , NY , OH , OK , OR , PA , RI , SC , SD , TN , TX , UT , VA , VT , WA , WI , WV , WY