Single-Premium Deferred Annuity (SPDA).

A Single-Premium Deferred Annuity (SPDA) is an annuity contract in which the policyholder pays a single premium, and the insurer agrees to make periodic payments to the policyholder at a future date. The payments may be made either in a lump sum or in installments, and the policyholder may elect to receive them either for a specified period of time or for the rest of his or her life.

SPDAs are most commonly used as a retirement planning tool, as they can provide a steady stream of income during retirement. However, they can also be used for other purposes, such as funding a child's education.

The main advantage of an SPDA is that it allows the policyholder to defer taxes on the earnings from the annuity until the payments are made. This can provide a significant tax advantage, as the earnings can compound over time without being subject to taxation.

Another advantage of an SPDA is that it offers the potential for higher returns than other types of annuities, such as fixed-rate annuities. This is because the payments from an SPDA are based on the performance of the underlying investment, which can fluctuate over time.

The main disadvantage of an SPDA is that there is a risk that the policyholder will outlive the annuity's term and not receive all of the payments that he or she is expecting. This is known as longevity risk.

Another disadvantage of an SPDA is that the payments may be less predictable than those from a fixed-rate annuity. This is because the payments from an SPDA are based on the performance of the underlying investment, which can fluctuate over time.

What are the two types of single premium annuities?

There are two primary types of single premium annuities: immediate annuities and deferred annuities.

With an immediate annuity, you make a lump-sum payment and begin receiving payments immediately.

With a deferred annuity, you make a lump-sum payment and defer payments until a later date.

What are the three basic phases in the life of an annuity?

The three basic phases of an annuity are the accumulation phase, the payout phase, and the maturity phase. During the accumulation phase, the annuity owner makes periodic payments into the annuity. This phase typically lasts for several years. During the payout phase, the annuity owner begins to receive periodic payments from the annuity. This phase typically lasts for several years as well. Finally, during the maturity phase, the annuity owner receives a lump sum payment from the annuity. Is an equity indexed annuity fixed or variable? There are two main types of annuities: fixed and variable. Equity indexed annuities are a type of fixed annuity, which means that they have a guaranteed minimum rate of return. However, the actual return on an equity indexed annuity may be higher or lower than the minimum, depending on the performance of the stock market.

How long does an annuity last? An annuity is a financial product that pays out regular income payments to the annuity holder over a fixed period of time. The length of time that an annuity lasts is determined by the terms of the annuity contract. Some annuities can last for a single person's lifetime, while others may only last for a set number of years.

What is a flexible premium deferred annuity? A flexible premium deferred annuity is an insurance contract that allows the policyholder to make periodic payments into the annuity, which is then invested by the insurer. The policyholder can choose to receive benefits at a later date, either in a lump sum or in the form of an annuity.