Not Ideal for All

Immediate annuity plans are not ideal for investors who seek high returns or liquidity. They are good for risk-averse investors who want to lock into a basic income for 20 or 30 years. This type of investment assures guaranteed income at regular intervals as well as safety of amount invested (as the funds are invested in government securities, which do not fail), and can provide a legacy corpus amount to your spouse after your demise. Perhaps it will be right to say that you should not invest the entire amount in it and may keep it as an additional plan along with post office schemes, senior citizens savings schemes and government bonds to maximise guaranteed additional income. The immediate annuity plan can be a great replacement of income for retirees. It ensures that their savings are protected and it also provides the comfort of having a monthly inflow to manage regular expenses.