Receiving future payments

If you have been involved in a settlement where you have received payments over time then you may have been given an annuity. Many of these financial arrangements where cash for annuity payments can be made and are paid out in the form of a annuity. There are several different types of annuities and each one has specific advantages. Deferred annuities are used for long term investment and can either be fixed or variable. As the names suggest the fixed annuity is a set interest rate that is paid out over time while a variable can fluctuate with the investments made and are slightly higher in their risk. The nice thing about deferred annuities is that they accrue tax free which help them compound their value much quicker than other types of annuities. The other type of annuity is Immediate annuities. As the name implies they begin paying you an immediate income and last for a specified time. They are often used by companies as part of the retirement package and pension plan.