Immediate Annuity - Advantages Of Immediate Annuities

The word Annuity says that income obtained from the capital investment which is paid in series of interval to the customer. Immediate Annuity can be clearly understood by taking an example. Consider that a person is saving his money in the bank and he wants to make a fixed deposit of that money. When he makes fixed deposit then the bank pays to him the interest in regular intervals. That money which the bank is paying to the customer in terms of interest is called as Annuity.

If you are about to retire, an immediate annuity may be a good place to invest a large lump sum of money. An immediate annuity can provide dependable security and a stream of income payments that will continue for the rest of your life or for a period you select. The income payments you receive from a fixed immediate annuity will never change and are based on the amount you contribute. To purchase an immediate annuity, you make a one-time payment and distributions typically begin within a month, but you cannot delay it for one year.

ADVANTAGES OF IMMEDIATE ANNUITY:
Security- the annuity will provides guaranteed lifetime income.
Simplicity- the annuitant does not have to manage his investment and also can be unserstood easily.
Good returns- the interest paid to the customer or annuitant is very good and part of the principal amount is returned with each payment.
Safety- the money kept is secured and doesnt makes any difference if there is a change in the fluctuation in the stock markets or share markets.