Are you looking for a way to save your money in a manner that you receive payments from it regularly? Do you want to be assured that you will receive a certain amount of money monthly for the rest of your life? Then the immediate annuities are an excellent investment option for you. An annuity is a contract between an insurance company and an individual where the person has to pay a premium/premiums and is assured capital gains. Immediate annuities require an individual to pay a lump sum of money to the insurance company and in return receive payments from it virtually immediately. The individual decides the time period for which he will continue to receive such payments; it may be for life or a fixed time period such as 10 to 30 years.

The amount that the person will receive from the immediate annuity depends on a variety of factors and includes the life expectancy of the person, lump sum money invested, expected rate of interest on this money, etc. The payments will continue for the fixed time period or during the person’s lifetime. After the investor’s death the heirs or partner will not continue to receive money from the immediate annuity. However the immediate annuity can also be invested in jointly so that if one of the partners passes away the other will continue to receive income from the annuity. Payments from joint immediate annuities are lower as they are calculated on the basis of the life expectancy of both the partners.

It is important to understand that the amount received from the immediate annuity is fixed, and thus should be decided after careful consideration of factors such as inflation. It is suggested that a person invest all their money into immediate annuities but put aside a certain amount for other investments and those can be used to supplement the income from the immediate annuity.