I might be overthinking, but based on this text from the CFA curriculum it seems that immediate variable annuity GUARANTEES an income for lifetime, whereas deferred variable annuity doesn’t (unless a rider is added - just for deferred). Is this true? Or neither of them offer a guaranteed lifetime payment, and it solely depends of the performance of the underlying?
Can anyone help with this please?
Immediate vs deferred means payment starts now or later, respectively. Variable means the payments are NOT guaranteed, unless the annuitant has the guarantee rider in place.
The annuitant also has the option to annuitize, i.e. use the accumulated value to buy an annuity that will provide a fixed payment stream.
Hi
I think that’s how it works. The deferred variable annuity aims to provide investment growth and does not guarantee lifetime income unless the rider is included or the contract is annuitized.
It looks a bit counterintuitive to me.