Annuities offer individuals an option of investing money in a manner that suits them best, in order to gain guaranteed returns from the annuities. There are many different types of annuities and immediate annuities offer investors an opportunity of making a lump sum payment, after which they immediately begin to receive payments from their investment. The payment from the immediate annuity begins one time period after the investment is made, for instance for monthly payments option the payments begins one month after the premium is paid.

The income received from immediate annuities is calculated by taking into account various factors such as life expectancy of the investor and expected rate of return on the investment. The advantages of immediate annuities make it an ideal investment for people who are averse to risky investments and wish to receive money from the investment right away. However it is recommended that the investor not put in all his savings into immediate annuities as firstly with the rising inflation the income received from the immediate annuities may not be enough in the future, secondly the rate of return is low compared to other annuities and finally the payments from annuities is discontinued after the death of the investor. While a joint immediate annuity would provide income to the survivor in event of the death of one of the investors, the payment from the annuity in such a case is lesser as the life expectancy of both partners is taken into consideration when calculating the income.