Business and Personal Finance Dictionary

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• IMMEDIATE ANNUITY
  
  You buy an immediate annuity by paying the full cost of the annuity contract at the time of purchase. The annuity then begins paying income right away or within a year at the latest. Immediate annuities appeal to people who want to convert a large sum of money to a source of regular income, either for their own retirement or for a beneficiary. You can choose a fixed immediate annuity, which guarantees the amount of income as well as the terms of the contract, or a variable immediate annuity, where the income generated is based on the performance of the investment portfolios, or subaccounts, that underlie the contract.
  
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