An immediate annuity (SPIA) is funded with:
Explanation
A single-premium immediate annuity is purchased with one lump sum, and income payments begin within roughly one payment interval (for example, within a month for monthly income). It cannot be funded with ongoing flexible premiums, is not restricted to employer contributions, and is not funded by borrowing. Retirees often use a SPIA to turn a lump sum, such as a rollover, into an immediate guaranteed income stream.
This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 716 questions free — no signup required.
Own the complete California Life & Health Insurance Producer Exam guide — PDF + EPUB, $19.99 →
Related questions on this topic
- A 'joint and survivor' annuity continues payments:
- Which annuity payout option provides the largest periodic income for a given amount of money?
- A surrender charge in a deferred annuity is:
- A key advantage of an annuity's accumulation phase is that the earnings:
- When recommending an annuity, a producer must assess suitability, which includes considering the client's:
- An 'annuity certain' (period certain only) option pays income:
Last reviewed: · editorial process