© 2015 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Immediate Annuity


An immediate annuity is a twisted version of a life insurance policy. In a typical life insurance plan, say it's term life, you pay $75 a month "forever" and when you die, your wife and the pool boy she later marries get a million dollar check. In an immediate annuity, you write a big check to the insurer up front who then pays you in partial payments over time. That is, the annuity "annuitizes" immediately. Yes.