Single Premium Immediate Annuities

Single Premium Immediate Annuities (SPIAs) provide guaranteed income that starts almost immediately after purchase, making them ideal for clients who need income now. How SPIAs Work You make a single lump-sum payment to an insurance company, and in return, they guarantee periodic payments for a specified period or for life. Income typically begins within 30 days to 12 months Payments are guaranteed regardless of market conditions Once purchased, the contract terms are locked in Payment Options Life Only Highest payout rate. Payments continue for your lifetime but stop at death with no remaining value to beneficiaries. Life with Period Certain Payments continue for life, but if you die before the certain period (e.g., 10 or 20 years), beneficiaries receive remaining payments. Joint and Survivor Payments continue for both spouses' lifetimes. When one spouse dies, the survivor continues receiving payments (often at a reduced rate). Period Certain Only Fixed number of payments regardless of lifespan. If you die early, beneficiaries receive remaining payments. SPIA Advantages Simplicity: No investment decisions or management required Guaranteed Income: Payments continue regardless of market performance Longevity Protection: Cannot outlive lifetime payment options Higher Payouts: Generally higher income than systematic withdrawals Considerations Limited or no access to principal after purchase Payments may not keep pace with inflation (unless inflation-adjusted) Guarantees depend on insurer's claims-paying ability