Split Annuities Defined

Split annuities are very tax efficient and intelligent investment vehicles combining two different types of annuities - a single premium deferred annuity and a single premium immediate annuity.

One annuity repays you a set sum of money each and every month over a specified period of time. The other annuity is left in place to grow on a fixed interest basis, with the goal being that by the time funds in your immediate annuity are depleted, the single premium deferred annuity will be restored to your original starting principal. This allows you to then restart the process with new prevailing interest rates.

The limits placed on the use of split annuities are issuing ages of the policies, usually age 0-85 for non qualified funds and 0-70 for qualified funds.

The immediate income periods range from 3 to 20 years.