Life · Chapter 9 · Premium & Timing Classes
Single Premium Annuity (SPIA / SPDA)
Definition
Fully funded with one lump sum — principal is created immediately and no further deposits are allowed. Income can start right away (SPIA — single premium immediate annuity) or later (SPDA — single premium deferred annuity). SPDAs sometimes include a bailout provision: withdraw penalty-free if the credited rate falls below a stated level.
Example
A lottery winner puts $4,000,000 into one annuity purchase — now the only choice left is income now (SPIA) or income later (SPDA).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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