3. There are deferred annuities, and then there are longevity annuities. A deferred annuity provides for an initial waiting period before the contract can be annuitized (usually between one and five years), and during that period the contract’s cash value generally remains liquid and available. By contrast, a longevity annuity generally provides no access to the funds during the deferral period, and does not allow the contract to be annuitized until the owner reaches old age.
In other words, many taxpayers purchase traditional deferred annuity products with a view toward waiting until old age to begin annuity payouts. With a longevity annuity, there is generally no choice, but this also allows for larger payments for those who do survive to the starting period.