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Immediate and deferred annuity: what is the difference?

US annuity is a structured product of life insurance companies. Each state has its own requirements and regulation of such contracts. Forbes talks about the difference between immediate and deferred retirement annuities.
Immediate and deferred annuity: what is the difference?

The first payment in Deferred Annuity is not paid immediately, as is in the case with immediate annuity. Deferred annuity is a type of pure life annuity that guarantees a reliable cash flow until death. After the death of annuity recipient, the cash benefit can be transferred to the beneficiary.

Deferred annuity increases during the accumulation phase (also known as the deferral phase).

Immediate annuity is usually more expensive than deferred annuity, as payments usually start within a month of purchase. Such an annuity is most often bought by people whose employers save up money in pension funds.

Source: https://www.forbes.com/advisor/retirement/immediate-vs-deferred-annuity/

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