ss_blog_claim=a269636d7e1dddbc1e13f97cea83418css_blog_claim=a269636d7e1dddbc1e13f97cea83418c
Billion Dollar Income

Single Premium Annuity

Download the FREE Guide to the Top Sources of Passive Income

Single Premium Annuity. All about the Single Premium Immediate Annuity (SPIA), Single Premium Deferred Annuity (SPDA) and the pros and cons of each.

Single-Premium Deferred Annuity

Single-premium deferred annuities (SPDA) are fixed annuities that can be purchased with a single premium. There will be a guaranteed interest rate, and taxes are deferred until withdrawal. Generally, the longer the guaranteed interest rate, the lower the rate itself.

Thus, the most important factors you need to consider when purchasing a SPDA are the following: the interest rate offered, the length of time over which the interest rate will be guaranteed, the stipulated surrender period. The length of the guaranteed interest rate should at least be as long as the surrender period, as you would otherwise be taking a significant risk when the guaranteed interest rate expires.

Difference between SPDAs and Variables Annuities

When you purchase a SPDA, the premium is deposited in the general account of the insurance company. In contrast, when you purchase a variable annuity, the premium is deposited in a separate account. This means that the insurance company would give you some freedom as to where your money can be invested. You are free to choose from among the mutual funds available, and can transfer money between mutual funds at any point in time.

Single Premium Immediate Annuity / Single Premium Income Annuity

Single Premium Immediate Annuities (SPIA) are a type of single premium annuity where there is no IRS penalty tax for withdrawals before the age of 59.5. The annuitant is also guaranteed fixed monthly payments which begin the moment the investment has been made.

The monthly payment is calculated based on several factors: the annuitant’s initial investment, age, current interest rates, and the length of time for which the monthly payment is to be paid.

Some special accounts offer life-plus-five or life-plus-ten policies, whereby monthly payments continue even after an annuitant’s death.

However, a single premium annuity like the Single Premium Immediate Annuity will not make sense in a low-interest environment, as you would then be locked into a low-interest for the rest of your life in. ***C2_invitation_21464505***

Free Billion Dollar Income Newsletter

Sign up for the free Billion Dollar Newsletter. Filled with ideas and strategies on generating wealth, personal effectiveness, how to apply the law of attraction, how to make money online and more, this newsletter is a powerful way to start your week.

Your email address will be kept confidential. Easily unsubscribe at any time.

Sign up right here:

Email
Full Name
Feel free to link to this page to share the information here
ADD TO YOUR SOCIAL BOOKMARKS: add to BlinkBlink add to Del.icio.usDel.icio.us add to DiggDigg
add to FurlFurl add to GoogleGoogle add to SimpySimpy add to SpurlSpurl Bookmark at TechnoratiTechnorati add to YahooY! MyWeb

Return from Single Premium Annuity to Understanding Annuities

Subscribe to this site for free, and get a Free Guide to the Best Sources of Passive Income

Email

Name


Special Offer

Purchase a text-link ad on this site (Alexa rank in top 0.5% of all sites) for only $9.99 a month - Advertising Options at Billion Dollar Income


BillionDollarIncome.com
Google
           
     

Copyright © 2008-2010 Billion Dollar Income.

By accessing and using this page, you agree to our Disclaimer, Privacy Policy and Terms of Use.