Single premium annuities are purchased with one, lump-sum premium payment. Some single premium annuities do accept additional premiums during a short, specified time period at the beginning of the contract.
Flexible premium annuities accept several premium payments during the life of the contract. These premiums generally can be of varying amounts as long as an annual minimum is met. This type of annuity would make possible the sort of retirement savings where small monthly payments are added — to an IRA, for example.
14274-B (06/08)
Note that a 10% IRS penalty may apply to any withdrawals taken prior to age 59½; this penalty would be in addition to any normal taxation of the withdrawal.
The following applies if the annuity is purchased through a bank or a credit union: (a) the annuity is not a deposit; (b) the annuity is not guaranteed by any bank or credit union; (c) the annuity is not insured by the FDIC or any other governmental agency; (d) the purchase of an annuity is not a provision or condition of any bank or credit union activity; and (e) some annuities are subject to investment risk and may go down in value.
Product availability varies by state.