Immediate annuities are income stream products purchased with a single lump sum of money which return the earnings and in some cases the capital and earnings in a structured regular manner over an agreed period of time. Immediate Annuities can be purchased with either superannuation or ordinary money. The purchase price for an annuity is dependent on the desired income, current interest rates and whether capital is to be utilised or preserved. Annuities can be tailored to suit particular needs. Minimum investment is usually $10,000.
Immediate annuities are offered mainly by life insurance companies. Immediate annuities can be used to meet or supplement income needs.