immediate annuity

An immediate annuity provides a steady monthly income for the retiree.

Definition

1. Noun:
   • A financial contract: An "immediate annuity" is a type of annuity contract where payments to the annuitant begin almost immediately after a single lump-sum premium is paid. It is designed to provide a guaranteed stream of income, typically for the remainder of the annuitant’s life or for a fixed period.

Usage Examples

• Noun:
  • She purchased an immediate annuity with her retirement savings to ensure a steady income starting next month. (A financial product that starts paying out quickly after a lump sum is paid.)
  • Unlike deferred annuities, an immediate annuity begins payments within one year of the contract's start date. (A contrast highlighting the immediacy of the payments.)

Advanced Usage

• "immediate annuity vs. deferred annuity": The key difference is the start of payments. An immediate annuity begins payments almost at once, while a deferred annuity delays payments until a later date.

  • He chose an immediate annuity to cover his living expenses right after retiring, rather than waiting for a deferred annuity to mature. (A practical comparison of payout timing.)

• "lifetime immediate annuity": A specific type that guarantees payments for the annuitant's entire life, regardless of how long they live.

  • A lifetime immediate annuity provides financial security by ensuring she will receive payments until she dies. (A subtype focusing on life-long income.)

Variants and Related Words

• Immediate (adj): occurring or done at once; instant.

  • The immediate effect of the annuity was a reliable monthly check. (The direct, quick result.)

• Annuity (n): a fixed sum of money paid to someone each year, typically for the rest of their life.

  • An annuity can be structured as immediate or deferred. (The broader category of financial product.)

Synonyms

• Single-premium immediate annuity (SPIA): a technical synonym for an immediate annuity paid with one lump sum.

  • She invested in a single-premium immediate annuity to simplify her income plan. (A more specific term used in finance.)

• Income annuity: another term emphasizing the income-generating purpose.

  • An income annuity like this one is ideal for retirees. (A synonym focusing on the outcome.)

Related Idioms

• "Immediate gratification": While not a direct idiom for "immediate annuity", this phrase captures the concept of receiving benefits quickly, which contrasts with delayed gratification.
  • An immediate annuity offers immediate gratification in the form of prompt payments. (A figurative comparison to the psychological principle.)

Phrasal Verbs (Not applicable)

• There are no common phrasal verbs associated with "immediate annuity" because it is a financial term rather than a verb-based phrase.