Immediate Annuities:
With an immediate
annuity, the annuitant pays an insurance company
a certain amount of money as a premium. In
return for this premium, the insurance company
promises to pay a specified amount to the
annuitant (or his or her beneficiary) for a
specified period. With an immediate annuity, a
60-year-old annuitant may pay a $100,000 premium
to an insurance company. After considering the
annuitant's age and gender the company will then
guarantee to pay the purchaser some fixed fee
per year for as long as he or she lives (or a
certain period of time). A portion of this
payment is considered a return of premium and
therefore not taxable to the annuitant. The
remainder is considered interest and will be
taxable as such. One of the advantages of an
immediate annuity is that an annuitant cannot
outlive his or her guaranteed payments.Additional Information on
Annuities:
Deferred Annuities
 Immediate Annuities
Who Should Invest in an
Annuity? -Investor Profile
Tax Deferred Accumulation
Tax Preferred Payouts
Guaranteed vs. Promises
Fees
Carrier's Financial
Strength
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