WHAT ARE THE DIFFERENT KINDS OF ANNUITIES?

This guide explains major differences in different kinds of annuities to help you understand how each might meet your needs.  But look at the specific terms of an individual contract you're considering and the disclosure document you receive.  If your annuity is being used to fund or provide benefits under a pension plan, the benefits you get will depend on the terms of the plan.  Contact your pension plan administrator for information.

This Buyer's Guide will focus on individual fixed deferred annuities.

Single Premium or Multiple Premium

You pay the insurance company only one payment for a single premium annuity.  You make a series of payments for a multiple premium annuity.  There are two kinds of multiple premium annuities.  One kind is a flexible premium contract.  Within set limits, you pay as much premium as you want, whenever you want.  In the other kind, a scheduled premium annuity,  the contract spells out your payments and how often you'll make them.

Immediate or Deferred

With an immediate annuity, income payments start no later than one year after you pay the premium.  You usually pay for an immediate annuity with one payment.

The income payments from a deferred annuity often start many years later.  Deferred annuities have an accumulation period, which is the time between when you start paying premiums and when income payments start.