The other day, our company played host to an insurance company. They were invited in to conduct a talk on insurance and the different policies they have. There was good response from the audience with quite a number of them signing up for various policies. There were even a few taking up an immediate annuity insurance policy.
Like all annuities, an immediate annuity is an agreement between you and a life insurance company. In this agreement, you pay the life insurance company a sum of money. In return, the life insurance company pays you a series of payments.
There is one main difference between an immediate annuity and a deferred annuity. With an immediate annuity, the payments from the life insurance company begin immediately.