Definition of "Immediate Annuity"

This is the opposite to a deferred annuity in which the annuitant elects to take the annuity at a later date an immediate annuity is taken immediately with no deferment. An annuity contract that you generally buy with a lump sum and from which you begin receiving income within a short period, always less than 13 months. An immediate annuity can be either fixed or variable. Annuity purchased with a lump sum that begins to pay regular income soon after purchase. There is no investment growth period. A contract in which annuity payments are made at the end of each payment period. Payment periods may be monthly, quarterly, semi-annually, or annually.

An annuity that begins to pay regular payments within the first year after purchase.

An annuity for which the income benefit begins within a one year period after the payment of a single premium.