Which type of annuities begins payments immediately?

Immediate annuities are designed specifically to start making payments to the annuitant right away, typically within one month of the initial investment. This type of annuity is often purchased by individuals looking for a reliable income stream in retirement or after a lump sum payment.

Unlike deferred annuities, which accumulate funds over time and begin to pay out at a later date, immediate annuities do not have this waiting period. They require a single premium payment, and in return, the annuitant receives regular payments that can be for a fixed period or for the lifetime of the individual.

While variable and fixed annuities can be structured to eventually provide income, they typically involve accumulation periods before disbursement begins, thus distinguishing them clearly from immediate annuities. Immediate annuities are all about current cash flow, making them a popular choice for those seeking immediate income.