Single Premium Group Annuity
What Does Single Premium Group Annuity Mean?
A Single Premium Group Annuity is a type of annuity purchased with a one-time premium payment that provides benefits to a group of people. In the context of insurance, businesses often use this arrangement to provide benefits for their employees. Companies pay an insurance provider to set up the annuity, ensuring group coverage and financial security for their employees.
Insuranceopedia Explains Single Premium Group Annuity
Many companies opt for Single Premium Group Annuities instead of setting up multiple individual annuities because it is faster and more convenient to manage a single policy. This approach allows benefits to be distributed among all participating employees while requiring the employer to make only one premium payment. However, since this single premium covers benefits for multiple employees, it can be significantly expensive.
