Income Annuity

A contract entered into with an insurance company where an upfront premium is exchanged for a stream of steady income payments. These income payments can continue for a specified period of time or for life, or both. A Single Premium Immediate Annuity (SPIA) is an income annuity with payments starting immediately. A Deferred Income Annuity (DIA), on the other hand, has income payments starting as late as 40 years in the future.