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What is the difference between an immediate annuity and a deferred annuity?

April 26, 2017Annuity Deferred difference immediate

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What is the difference between an immediate annuity and a deferred annuity?

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An immediate annuity is designed to make its first benefit payment at one payment interval from the date or purchase. An immediate annuity is really nothing more than a distribution vehicle a way to convert a sum of money into a stream of income. A deferred annuity is designed to provide income payments beginning as some specified future date.