Deferred annuity

It is possible to establish a purchased life annuity to start paying out at a future date, this being known as a deferred annuity.

The period between the date of the contract and the date the annuity is to commence (often called the vesting date or the maturity date) is the deferred period. Regular sums would be put aside to fund the annuity, often during the deferred period.

If death occurs before the scheduled date for the start of the policy, the premiums are usually repaid, with or without interest. The annuity becomes payable once the vesting date is reached and will continue for the rest of the annuitantís life.