YOU ASK:
What is the definition of Deferred Annuity?
WE ANSWER:
A Deferred Annuity is a kind of annuity contract that makes income payments or a lump sum at the time when the annuitant specifies (like at the time of a person's retirement). It provides a time for the annuitant to save up by making deposits to the fund (called a savings phase). The time when the payments are due is called the income phase.
The annuity generally does not allow withdrawals. However, if you still want to make a withdrawal, it may be subject to a very heavy penalty, in addition to the income taxes you would normally pay.
Deferred annuities can either be fixed or variable. They are also called an investment annuity.
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