Get Smarter

So you’re looking into exclusion ratios for immediate annuities, SPIAs, also known as Single Premium Immediate Annuities. In essence, the short answer to the exclusion ratio is that, with immediate annuities lifetime income stream, you're going to get a combination of return of principal plus interest based on your life expectancy at the time you make the payment.

Okay, so let's talk about single premium immediate annuity's acronym, SPIA, S-P-I-A. They are the oldest annuity type on the planet and were introduced in Roman times as a pension gift, a lifetime income stream gift to the dutiful Roman soldiers and their families for laying it on the line for the empire.

Deferred Income Annuities (DIAs) are continuing to grow in popularity because they are a personal pension plan with you determining when the payments start.

It’s kind of sad that the annuity category is experiencing somewhat of a renaissance during this Coronavirus crisis. It kind of makes sense that contractual guarantees become a little more attractive when the future is a tad hazy and unpredictable. In addition, stock market volatility always makes people reassess the overall risk in their portfolio.