Hyers & Associates

An immediate annuity is an investment account that begins systematic income from inception. This process is referred to as an annuitization. The annuity works very much like a pension payment or a Social Security benefit as it generates immediate income. The income can be guaranteed for a specified period of years as well as the lifetime of the policy owner.

Consumers invest in annuities for many reasons. An immediate annuity might be purchased to guarantee income for a retiree. In some cases, creditor protection from a lawsuit or Medicaid recapture might be the cause of concern. Other times, immediate annuities will be purchased as part of a structured settlement agreement between a plaintiff and a defendant.

Annuity Pension and Guaranteed Income

Consumers have several options when they purchase an immediate annuity or annuitize an existing annuity. A “life annuity with period certain” is one option. This choice guarantees interest payments for the insured’s lifetime. If death occurs during a designated period of time, five or ten years for example, the remaining account value pays out to the named beneficiary. Still other annuitizations guarantee to pay, five or ten years for example, with no lifetime option.

A more aggressive annuitization alternative is the “life annuity.” This option will have a higher systematic payment to the consumer, but no guarantees to a beneficiary at passing. Ohio residents concerned only with meeting income needs might select a life annuity to provide the highest guaranteed interest payment.

Income Strategy Defined

Immediate annuities are simply used for income purposes because of their guarantees. The amount of the systematic payment depends on age, gender and the sum of the initial investment. Many fixed and equity-indexed annuities can be transferred into immediate annuities after one or more years if necessary.

In summary, an immediate annuity can be advantageous in many circumstances. Most annuities are not annuitized, but it is available as a current or future income generating benefit.

We work with several leading insurance companies to provide competitive annuity products. Depending on your needs, an agent can recommend the appropriate type for you.

Please Contact Us for more information about immediate annuities.