What is a key feature of an immediate annuity compared to other annuities?

An immediate annuity is specifically designed to provide income to the annuitant very shortly after the initial investment is made, often starting as soon as one month after the contract is purchased. This distinguishes it from other types of annuities, which typically have a significant accumulation phase where funds grow before any payouts are made. The primary appeal of an immediate annuity is its ability to deliver immediate cash flow, which can be especially beneficial for individuals seeking financial security in retirement or consistent income for their living expenses.

The other features associated with different annuity types—like a lengthy accumulation period or rapid cash value accumulation—do not apply here. Immediate annuities focus on providing immediate benefits rather than prioritizing growth or investment duration. Additionally, while some annuities may require a larger initial investment, this is not a defining characteristic of immediate annuities compared to others. Thus, the key feature that sets immediate annuities apart is their provision of immediate income.