Immediate Annuity — an annuity purchased with a single premium under which payment to the annuitant begins at the end of the first prescribed payment period. If, for example, payments will be on a monthly basis, the first payment will be made 1 month after the annuity is purchased. If the income period begins at the inception of the first income period, the annuity is an "annuity due." Immediate annuities are most often purchased as a settlement option under a life insurance policy.