What Is SPIA (Single Premium Immediate Annuity)?

Why it matters

A SPIA turns savings into a reliable income stream. The payout depends on age, the amount paid, the payout option chosen, and interest rates at the time. Once the contract starts, the choice is usually irrevocable and cash access is limited. Payout options include life only, life with period certain, and joint and survivor. Life only pays most but leaves nothing for heirs. Rates and options vary by carrier.

Source: investor.gov

Related terms

Annuity: An annuity is a contract with an insurance company in which you pay a lump sum or a series of payments. In return, the insurer agrees to make payments to you, either right away or at a future date.
Annuitization: Annuitization is the process of converting an annuity's value into a stream of regular income payments. Payments may last for life or for a set number of years, depending on the option chosen.
Deferred Annuity: A deferred annuity is an annuity contract that delays payments until a future date chosen by the owner. Until then, the money can grow during an accumulation phase, tax deferred.
Income Rider: An income rider is an optional annuity feature that guarantees a stream of lifetime income, often based on an income base that grows at a stated rate. It usually costs an annual fee.
Fixed Annuity: A fixed annuity is an insurance contract that earns a stated interest rate set by the insurer. The rate is guaranteed for a period, and the insurer promises a minimum interest rate for the life of the contract.

All 241 terms

Single Premium Immediate Annuity (SPIA)

Why it matters

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