Immediate Annuity

Annuities are a good way of investing large sums of money for your future years. They have been in existence for some time now. When they first came out in the beginning you only had one option, but today you have several choices when it comes to investing in annuities. The immediate annuity is just one of these options, but it is a good one for certain people. When investing in an immediate annuity you invest with an annuity insurance provider. You'll then begin benefiting from that investment with payments immediately in contrast to the deferred annuities plans where you will have to wait for a stipulated time before you begin to receiving your annuities payments.

The immediate annuity normally has smaller interest crediting rates than the fixed annuity and even the variable annuity plans because an immediate annuity plan does start paying immediately. Nevertheless, the immediate annuity plans also have additional benefits to consider which compensates for the lower rates.

Since the immediate annuity provides a lower interest rate, you may be wondering exactly who would benefit from it? Actually, those who will benefit the most is someone that has recently received a large amount of money from an inheritance, someone who has won the lottery received large amounts of money from other unexpected event. The reason these types of people will benefit the most is mainly because the immediate annuity gives them a way to access the funds in a way that is prudent and a set length of time instead of squandering it away rather quickly because of lack of money management experience or lack of self control and then end up asking themselves what happened to it all later.

Anyone who has a suddenly received a significant amount of cash that isn't really good with managing money well will benefit significantly from an immediate annuity. There are two options you can choose from with this kind of annuity. One is known as the variable immediate annuity and the other is the fixed immediate annuity. Most people will usually choose the fixed annuity since it guarantees you a specific monthly payment. By making this selection you are going to always know how exactly how much you're going to be getting and when so you can plan your budget accordingly. Some individuals do choose the variable annuity though it is not usually suggested.

An immediate annuity offers you a number of great benefits. For example you will have the option of receiving payments for the rest of your life. You can also choose to only receive them for a certain period of time. The immediate annuity provides you with a certain degree of income that you can depend on in the future. This is what most people want and appreciate that they can depend on it with an immediate annuity.

Aside from the security, an immediate annuity is the simplest of all the annuities available, mainly because you won't need to manage a portfolio. An immediate annuity provides you with an immediate income, even as soon as the annuity is purchased. You get to arrange it so you can to receive payments on a regular monthly basis, quarterly, semi-annually or in annual or yearly payments. The choice is yours. Also, like other annuities, the immediate annuity comes in various forms. Make sure you talk to an agent from your annuity company who can help you decide which form is right for you. For instance, you may choose from ‘joint and survivor annuities’ or a ‘straight life annuity’. You will also be asked to choose your payment preferences and for a set time period such as for life or for ten to 20 years.

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