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A deferred annuity is a contract that you can purchase from an insurance company. In exchange for a lump sum payment or a series of payments, called the premium, the insurance company agrees to pay...
Despite its advantages, a deferred annuity has some clear drawbacks, some of which are substantial.
Deferred annuities postpone payments until a future date you select. The earlier you buy your annuity and the longer you defer, the more interest it builds. This allows you to have higher monthly ...
A deferred annuity that permits allocations to stock or bond funds and for which the account value is not guaranteed to stay above the initial amount invested is called a variable annuity (VA). A new category of deferred annuity, called the fixed indexed annuity (FIA) emerged in 1995 (originally called an Equity-Indexed Annuity). [5] Fixed ...
An annuity that begins payments only after a period is a deferred annuity (usually after retirement). An annuity that begins payments as soon as the customer has paid, without a deferral period is an immediate annuity. [citation needed]
Deferred annuities pay out at some specified time in the future, perhaps in retirement. Immediate annuities begin paying out within a year or less of purchase. In the table below, you can see how ...
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