An Immediate Annuity is a contract between an investor and an insurance company. The investor places a sum of money under the control of the insurance company for a specified period of time and in return the insurance company pays them an agreed upon sum each month. Immediate annuity rates are the amount of money the insurance company offers to pay the person. The immediate annuity rates are based on your gender and age, the term of the annuity and the type of annuity one purchases. The insurance company uses this information to calculate the immediate annuity rates they can pay.
There are several types of immediate annuities. Each one offers different immediate annuity rates. They include fixed, variable and inflation index annuities. Some pay fixed immediate annuity rates while others may offer immediate annuity rates which are tied to inflation. Some have their immediate annuity rates linked to the stock market. The immediate annuity rate on this type of account rises and falls with the market. Younger people often choose market linked immediate annuity rates while older people tend to prefer safe, consistent immediate annuity rates.
One of the first decisions a person investing in annuities must make is about the term or length of time the annuity will run. With a term certain annuity your immediate annuity rates will last for a set number of years. Should an investor choose a life annuity the immediate annuity rates will continue to be paid to the investor until they die. Choosing whether immediate annuities are for you is an important decision. If you choose wisely you can live comfortably for the rest of your life without having to work. Purchasing an annuity does require you to place a significant amount of money into the contract. It’s also important to understand once you sign the purchase contract for your immediate annuity you cannot withdraw your funds until the contract ends.
Getting good immediate annuity rates on your immediate annuity can offer you peace of mind. It can mean receiving a consistent, significant income each month.
