An Immediate Non-variable Annuity is a type of annuity contract specifically designed to start disbursing funds at the end of the first payment interval post-purchase. This type of annuity guarantees a fixed stream of income and must begin payouts no later than 13 months from the date of purchase.
Key Features
- Immediate Income: Start receiving annuity payouts shortly after purchase, generally within a year.
- Fixed Payments: The amount of income received each payment period does not change over time.
- Fixed Timescale: Payments must begin within 13 months following the annuity purchase to qualify as an Immediate Non-variable Annuity.
Suitability
Immediate Non-variable Annuities are suited for individuals nearing or at retirement age, who desire a steady and predictable income source immediately following investment. It inversely decreases total risk, as the payments are fixed and agreed upon at the outset. For regulatory guidance and further details on immediate annuities, stakeholders can refer to resources such as the Securities and Exchange Commission (SEC) [Guide to Annuities](https://www.sec.gov/oiea/investor-alerts-bulletins/ib_ variableannuities.html), or specific sections of the Internal Revenue Code related to the taxation of annuity products.
