Annuity type

Single Premium Immediate Annuity (SPIA)

Also called: Immediate annuity, income annuity

A lump sum handed to an insurer today in exchange for income that starts within a year — often for life.

Principal: No account value; principal converts to income
Liquidity: None — irreversible
Backed by: State guaranty association, within limits

The decoder

What the quoted number means

Payout rate (not a yield)

A SPIA quote like "7% payout" means the insurer pays 7% of your premium each year — but most of that is your own principal coming back. On a life-only SPIA, payments stop at death and nothing remains for heirs, which is exactly why the quoted number can look so high. The true internal return depends on how long you live and is typically far below the payout rate.

You hand the insurer a single premium; it commits to a payment schedule that starts within twelve months. The classic form is life-only — payments for as long as you live, then nothing — with variants that add period-certain guarantees or joint lives, each lowering the quoted payout in exchange for more protection.

The appeal is longevity insurance: you cannot outlive the check. The cost is that the capital is gone — there is no account value, no liquidity, and on life-only forms, no residual for the estate.

Who it tends to fit: longevity insurance — income you cannot outlive.

The honest comparison

SPIA vs. a payment stream

A guaranteed payment stream quotes a true effective yield on a fixed schedule that pays regardless of any life — and whatever remains is your estate's. (Life-contingent streams are different: they pay only while the original payee lives, at higher estimated yields, with a life-insurance hedge protecting the investor's yield.) A SPIA covers the one risk a fixed schedule cannot: living far beyond it. Many investors hold both for different jobs.

What the secondary market pays right now is on our current estimated yields page; for rate context on this product family, see immediate annuities and secondary-market income.

View Available Income Options All Annuity Types

SPIA questions

Is a 7% SPIA payout rate a 7% return?

No. The payout rate is the annual payment as a percentage of premium, and most of each payment is return of your own principal. The actual internal rate of return depends on how long you live — die early on a life-only contract and the return is deeply negative; live very long and it can exceed the payout math of fixed alternatives.

What happens to a SPIA when I die?

On a life-only contract, payments end and no value passes to heirs. Period-certain and cash-refund variants continue payments or refund the balance, in exchange for a lower quoted payout.

What these assets are, and what they are not

Guaranteed and life-contingent structured settlement payment rights, and lottery payment rights, represent the right to receive factored payments that Pacific Structured Assets purchases and assigns to investors through a court-approved process. They are purchased at a discount to their total scheduled payments.

These payment rights are NOT annuities, NOT insurance products, and NOT securities registered with the U.S. Securities and Exchange Commission. They are not bank deposits, are not FDIC-insured, and are not protected by any state insurance guaranty association. The industry term “secondary market annuity” refers to these payment rights and does not mean you are purchasing an insurance annuity contract.

You acquire the right to receive the payments, not the underlying annuity. The annuity itself does not change hands. Unlike the original structured settlement annuity, which may be shielded from creditors under applicable law, the assigned payment rights you purchase generally do not carry that creditor or bankruptcy protection.

Assigned annuities, offered as a separate product line, are existing insurance annuity contracts reassigned to a new owner through a change of ownership or an irrevocable change of payee.

These are long-term holdings with limited liquidity, and may not be suitable for every investor. There is no public trading market and no daily price. Resale or reassignment of a payment stream to another buyer may be possible, and Pacific Structured Assets can assist, but a resale is not guaranteed and the price it would bring is not guaranteed. Because the payments are fixed, that resale value moves with prevailing interest rates: an investor could realize a gain if rates have fallen since purchase, or a loss if rates have risen. These holdings are best suited to capital an investor can commit for the long term. Nothing on this website is tax, legal, financial, or investment advice. Consult your own advisors before investing.

Other types: DIA · QLAC · MYGA · Fixed deferred · Fixed indexed · RILA · Variable

Pacific Structured Assets

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