A Single Premium Immediate Annuity is funded by a single premium and begins immediate withdrawals within one year.

A Single Premium Immediate Annuity is funded by a single premium and begins immediate withdrawals within one year.

• A. Paid as a level annual premium over 20 years with delayed payouts
• B. A single premium that starts payments immediately
• C. Annual premiums with deferred payouts after several years
• D. A variable premium with no guaranteed start date

Answer: (B)

A Single Premium Immediate Annuity is all about turning a lump sum into a guaranteed income stream right away. You pay one lump sum up front (the single premium), and the contract starts making payments to you within a short time, typically immediately or within the first year. This distinguishes it from plans that require ongoing premiums over many years or that delay payouts. The other descriptions describe different premium structures or payout timing (level annual premiums with a long deferral, annual premiums with payouts after years, or a variable premium with no guaranteed start date), which do not match the idea of funding with one lump sum and starting distributions immediately.

A Single Premium Immediate Annuity is all about turning a lump sum into a guaranteed income stream right away. You pay one lump sum up front (the single premium), and the contract starts making payments to you within a short time, typically immediately or within the first year. This distinguishes it from plans that require ongoing premiums over many years or that delay payouts. The other descriptions describe different premium structures or payout timing (level annual premiums with a long deferral, annual premiums with payouts after years, or a variable premium with no guaranteed start date), which do not match the idea of funding with one lump sum and starting distributions immediately.