Many aspects of an annuity can be tailored to a buyer’s specific needs. Besides choosing between a lump-sum payment or a series of payments to the insurer, buyers can also choose when to start receiving payments. An annuity that begins paying out immediately is referred to as an immediate annuity, while one that starts at a predetermined date in the future is called a deferred annuity.
The duration of the disbursements can also vary. Buyers can choose to receive payments for a specific period of time, or for the rest of your (or your spouse’s) life. Naturally, a lifetime of payments may lower the amount per check. However, it helps ensure the buyer doesn’t outlive the assets – which is an annuity’s key selling point.