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Single Premium Immediate Annuities

The following are TERMS and Definitions associated with a SINGLE PREMIUM IMMEDIATE ANNUITIES. Below you will find sample SPIA presentations.

Single Premium Immediate Annuity (SPIA): A kind of annuity that may be bought into once and yields periodic payouts (monthly, quarterly, or annually) at the cost of compound interest. Future investments require a new annuity purchase.

Immediate Annuity: An annuity contract that begins its payout immediately or within a year.

Period Certain: An income option in an immediate annuity plan whereby the owner of the annuity contract may choose to receive periodic payments for a set period of time, with the payout amount determined by the contract's value and the length of the period of time chosen.

Straight Life Annuity: A type of annuity plan paying a specified amount over a set period of time until the death of the annuitant. There are no payouts available to survivors after the contract owner dies.

Annuity Certain: An immediate annuity income plan from which payments are made for a defined period of time, whether or not the annuitant lives or dies.

Annuity Period: The length of time between income payments made under an annuity income plan; the time span may be monthly, quarterly, semi-annually, or annually.

Exclusion Ratio: A calculation used to calculate the taxable and non-taxable parts of each payment to an annuitant from an immediate annuity. Part of each payment is considered a return of principal and therefore not subject to taxation, while the remainder includes earnings on interest, which are taxable.