Immediate annuity gets its name because with this type of annuity your income payments start immediately. You begin to receive your payments anytime within 12 months of purchase. Immediate annuities are designed to provide you with guaranteed income for your lifetime or for a specific number of years. They are also designed to provide you income payments for the rest of your life and for that of a loved one (spouse, sibling, etc.) It can also provide you with various refund options. The insurance company that provides an immediate annuity calculates the amount of income payment you will receive based on the amount you pay to purchase the annuity and your life expectancy. For immediate annuities you make a single lump sum premium and begin to receive income immediately.