A Single Premium Immediate Annuity (SPIA) makes payments beginning when?

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Study for the Minnesota Life Accident and Health Producer Exam. Prepare with flashcards and multiple choice questions with hints and explanations. Get ready for your exam!

Multiple Choice

A Single Premium Immediate Annuity (SPIA) makes payments beginning when?

Explanation:
A SPIA is funded with a single lump sum, and the word “immediate” means the income payments start right away after the premium is paid and the contract is issued. This contrasts with deferred annuities, where payments begin after a postponement period, or arrangements that pay only upon death or hinge on some accumulation threshold. So the payments begin immediately after purchase.

A SPIA is funded with a single lump sum, and the word “immediate” means the income payments start right away after the premium is paid and the contract is issued. This contrasts with deferred annuities, where payments begin after a postponement period, or arrangements that pay only upon death or hinge on some accumulation threshold. So the payments begin immediately after purchase.

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