Immediate Annuity
An immediate annuity is an annuity for which the time between the contract date and the date of the first payment is not longer than the time interval between payments. A common use for an immediate annuity is to provide a pension to a retired person or persons.
It is a financial contract which makes a series of payments with certain characteristics:
- either level or fluctuating periodical payments
- made annually, or at more frequent intervals
- in advance or arrears
- duration may be:
- fixed (annuity certain)
- during the lifetime or one or more persons, possibly reduced after death of one person
- during the lifetime but not longer than a maximum number of years
- during the lifetime but not shorter than a minimum number of years
Read more about this topic: Annuity (European Financial Arrangements)