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single-premium deferred annuity investment & finance definition
A tax-deferred annuity purchased by an
investor who makes a lump sum payment to the insurance company or mutual fund
that sells the annuity. A single-premium annuity is an investment used to fund
retirement. If the funds are withdrawn before age 59 1/2, a 10 percent penalty
is assessed. The annuity earns interest, while income tax is deferred. The
company issuing the annuity promises to pay back the principal on the maturity
date as well as make regular interest payments. See also annuity.
See single-premium deferred annuity in Wall Street Words
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