Single Premium Immediate Annuity (SPIA)

SPIAs are purchased with a single premium, as its name suggests. Most SPIAs begin paying you regular monthly income payments 30 days from your date of purchase, but you may prefer to begin your payments at some later date within the 1st year.

At the time of your purchase, you will select the terms for receiving your income payments. Once selected, you cannot change your mind. The most common types of payments are:

  • Period Certain. You receive level payments for a fixed number of years (5, 10, etc.). If you should die before the end of the period certain, payments will be paid to your designated beneficiary. No payments are made after the end of the specified period. You may live longer than the period certain selected.
  • Single Life. You receive fixed payments for the rest of your life. At the time of purchase, you may also choose a Period Certain option (5, 10 etc.) This feature serves to protect the value of your payments in the event of your premature death. Payments from SPIAs without refund features cease upon the annuitant’s death.
  • Joint & Survivor Annuities. This type of SPIA offers payments to one of two people, most commonly spouses. Usually, full level payments are made as long as both the annuitant and joint annuitant are alive. Upon the death of either the annuitant or joint annuitant, reduced (50%, 75%, etc.) level payments will continue to the survivor for as long he/she is alive.

Be sure to carefully read and understand your policy, ask questions of your agent and consult your tax advisor for information about possible tax consequences. Annuities are not insured by the FDIC nor guaranteed by any federal government agency.

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