Deferred Annuity

A single lump-sum premium paid at purchase, with income payments beginning at a later date — A single premium deferred annuity is purchased with one lump-sum premium, and the accumulation phase runs for a period before annuitization begins, which is why it is called deferred. During that period the cash value grows on a tax-deferred basis. This contrasts with an immediate annuity, which begins payments within a short time, and with a flexible premium annuity, which accepts multiple payments over time.

National insurance concept

The owner is not required to annuitize and may take withdrawals or surrender the contract for its cash value — Ownership of a deferred annuity does not force annuitization. After the surrender charge period, the owner may choose to take systematic withdrawals, surrender the contract for its cash value, or elect to annuitize and begin a guaranteed income stream. This flexibility is one of the product's attractions: tax-deferred accumulation continues until the owner decides how and when to receive the money.

National insurance concept