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Date Annuity Income Payments Begin

Basically, there are two options:

  • Deferred; or
  • Immediate.

The main difference between deferred and immediate annuities is when annuity payments begin. Every annuity has a scheduled maturity or annuitization date (usually age 90 or age 95), which is the point the accumulated annuity funds are converted to the payout mode and benefit payments to the annuitant are to begin. According to LIMRA, total sales of annuities in 2011 were $240.3 billion and of that number $227.1 were sales of Deferred Annuities and $13.2 billion were Immediate Annuities (which includes $5.1 billion of structured settlements, down 12 percent from $5.8 billion in 2010. (See Table 2.1)

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