Different types of Annuities in Insurance

Two main categories can be used to categories annuities:

Immediate annuity:

The time between the accumulation phase and the disbursal phase in an instant annuity is remarkably short. The accumulation phase of an annuity policy is the time when the policyholder is paying premiums. The annuity payments are given to the policyholder during the disbursal phase. According to the terms and circumstances of the annuity policy, payouts are handed out immediately in the case of an immediate annuity.

• Deferred annuity:

An immediate annuity is the complete opposite of a deferred annuity. In a deferred annuity, there is a protracted period of time between the accumulation phase and the point at which the policyholder receives annuitized payments. Payouts in a deferred annuity scheme begin at a future date rather than now because of a lengthier accumulation phase.