Deferred Annuity
What Does Deferred Annuity Mean?
A deferred annuity is an annuity in which the policyholder receives payments at a specified future date after making contributions over several years. In the context of insurance, many life insurance companies offer annuities as part of certain policies, serving as investment vehicles. These annuities can be used to supplement retirement income.
Insuranceopedia Explains Deferred Annuity
The benefit of deferred annuities is that they can provide a reliable and scheduled source of income at a future date, which is especially advantageous for the elderly who may no longer be able to work. The downside is the requirement to make contributions over a long period during the savings phase. However, this is not a concern for individuals who purchase life insurance to plan for their future financial needs. Many life insurance companies offer annuities as one of several investment options available within their life insurance policies.
