What Does Single Premium Group Annuity Mean?
A single premium group annuity is an annuity that is purchased with one premium but provides benefits for a group of people. In the context of insurance, many businesses pay insurance companies to set up single premium group annuities for employees at their company as a way to provide benefits for the employees.
Insuranceopedia Explains Single Premium Group Annuity
The reason many companies select single premium group annuities as opposed to setting up many different individual annuities is because it is simply faster and more convenient to just set up one. This way, the benefits can be dispersed amongst the various employees who are a part of the annuity, and the employer only has to pay a single premium. However, because this premium is providing benefits for many employees, it can be quite expensive.