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Annuities usually refer to the investment made by an individual in concern pre-retirement to enjoy the benefits of it in the streamlined days of post retirement. One of the reasons why annuities have emerged, as one of the top names in the list of retired friendly fund options, is that they ask for no collaterals or mortgages. This automatically lifts the burden off the individual’s head, of actually losing the ownership of his or her own property. Although the mortgage alternatives do not deprive the individual of his or her property immediately, and has its respective benefits, still the load of losing the ownership completely cannot be denied.

Annuities can primarily be branched into two groups that of immediate annuity and deferred annuity. Deferred annuities are opted for by many mainly due to the fact that the payments can be deferred in this case. This mode of annuity enables the individual in concern to opt for the payment option as and when he or she feels the need best. The individual in concern can also decide if he or she wants the amount in form of regular installments or all at once. This form of annuity comprises of two cycles, the investment and the income cycles. In the former case it is the individual who does the paying and in the latter case the payment is done by the insurance company in concern.
The deferred annuity has now come up with a new face, namely single-premium deferred annuity. This form of deferred annuities refers to a one time investment or premium payment. It resembles the normal deferred annuities, differing only in the time period of investment. In ordinary deferred annuities the premiums are paid at regular intervals up to the time of entering the income cycle arrives, unlike the single premium investment of the single-premium form of this type of annuity.

The single-premium deferred annuity has a particular age restriction as far as the completion of the annuity is concerned. This implies that the individual in concern cannot access his or her annuity unless he or she attains the age mentioned in the regulations of this form of deferred annuities. Usually the appropriate age to enjoy the benefits of this form of deferred annuity hovers around 55 years to 70 years.

The merits of this kind of deferred annuity are similar to the common form. They also help in saving the tax on the amount invested in the annuity till the maturity date. This facilitates the individual in concern to choose the medium of payment, that is whether the payment should be made all at once or on a regular basis. It also ensures a lifetime source of a required added income. The demerits of this form of deferred annuity also exist. This type of deferred annuities involves an interest first withdrawal method. This leads to some added expenses related to taxes as long as the interests have not been cleared. Therefore like all finance related options the individual in concern must first scrutinize all the options and then select prudently.