Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An immediate annuity is purchased with a single premium, and its income payments must begin:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
By definition, an immediate annuity is funded with a single premium and income payments begin within one payment interval — per the official CDI objectives, within 12 months of the contract date. This near-immediate payout is what distinguishes it from a deferred annuity, whose payments are delayed through an accumulation phase.
Why the other options are wrong
- B) The 59 and a half age threshold concerns penalty-free distributions from qualified plans and MECs, not when immediate annuity income begins.
- C) Five years of delay describes a deferred structure; immediate annuities begin income within a year.
- D) Immediate annuity payments start automatically according to the contract; no separate written annuitization request is required.
Memory hook
Immediate = buy a lump, collect within a year. Twelve months is the deadline.