Deferred annuities can be funded either with a single premium payment or through a series of premium payments over time. If a single payment is made, the contract owner cannot make additional deposits into the contract; the funding of the annuity is accomplished with one payment. For periodic premium payments, a certain minimum initial premium $500 - $10,000 depending on the insurer's requirements, for instance—may be required. However, the annuity owner can then make additional premium deposits of as little as $25, depending on the insurer’s requirements, as often as he or she wishes.
Immediate annuities are funded by a single premium payment. Minimum $10,000 and Maximum $1,000,000. More than $1,000,000 will need approval from the insurance company. You can fund your immediate annuity in a number of ways, including:
- Cash from a maturing Certificate of Deposit (CD)
- Exchanging monies accumulated in a Multi-Year Deferred Annuity account
- Proceeds from the sale of stocks, bonds, a home or a business
- A lump sum distribution from a tax-qualified defined benefit or 401k, or an IRA account