With a single premium deferred annuity, when will the annuity payments become available?

In the case of a single premium deferred annuity, the payments become available no sooner than one year after the annuity purchase. This type of annuity is designed to accumulate value over time, allowing the investment to grow before payouts begin. The deferral period can vary but is generally set so that the annuity owner will not receive annuity payments immediately after making a lump-sum purchase. By waiting, the insurer can invest the premiums and build a larger pool of funds for future annuitants.

This structure is beneficial for those who want to save for retirement or a specific future financial need while allowing their funds to grow tax-deferred. The payment period usually starts at a predetermined date specified in the contract after the deferral phase has been completed, which is typically at least one year.