Fixed, Immediate
Annuities

A fixed, immediate annuity is an insurance product that offers a fixed, periodic payment to you, the annuitant, to begin shortly (usually about a month) after you pay your premium to the insurance company. You choose the time frame over which you will receive your pay-outs

Either for a specified period (called a Period Certain )
Or for the rest of your life.

The most common usage of this type of annuity is to convert assets into a steady income during retirement.

Example
Mr. Ehnuitee, age 68, is a conservative investor who wants to have additional monthly income. He plans to sell about $50,000 of mutual funds that he currently owns and use the proceeds to buy a 10-year Period Certain Fixed, Immediate Annuity. His fixed pay-outs will begin in about a month. He likes the idea that he won't have to worry about market fluctuations with the mutual funds any more and that his pay-outs will be the same every month. He also likes the fact that, should he die before the 10-year period is over, his beneficiary will receive any remaining payments from that Period Certain.

What are the advantages of a fixed, immediate annuity?

• Guaranteed* periodic pay-outs**.
• Pay-outs begin immediately.
• Pay-out amount is not subject to market fluctuations.
  
  

  * Guarantees are based on the claims-paying ability of the insurer.

  ** Taxable Distributions (and certain deemed distributions) are subject to ordinary income tax.

What are the disadvantages of a fixed, immediate annuity?

• No choice of investment options.
• No flexibility. You may not change your pay-out option or your periodic pay-out amount once the pay-outs begin.
• Not a liquid investment. Withdrawals are not allowed unless the annuity has a commutation (cancellation) provision.

For what type of investor is a fixed, immediate annuity suitable?

• Is seeking a fixed, periodic pay-out
• Does not want to worry about market fluctuations and have to manage their investments.

Can one make withdrawals from a fixed, immediate annuity?

No. Withdrawals from a fixed, immediate annuity may be made only if there is a commutation (cancellation) provision written in your annuity contract.

What pay-out options are available from a fixed, deferred annuity?

Most fixed, deferred annuities offer several standard pay-out options - ranging from pay-outs for a specified period of time (Period Certain) to pay-outs for life.