The question is simple: when does the income start?

Single premium immediate annuity (SPIA): you pay one lump sum and income starts right away, usually one payment interval after purchase (for example, one month later for monthly payments). Under the CDI exam objectives, the first payment from a SPIA must be made within 12 months of the contract date. Typical buyer: a retiree who just received a lump sum and wants a paycheck now.

Deferred annuity: income starts at some future date. It can be funded with a single premium or with flexible premiums over time, and is mainly used to accumulate retirement money. The insurer credits the current rate or the guaranteed minimum rate, whichever is higher.

What drives the size of each payment: the amount paid in, the payout option and payment frequency, interest rates, and the annuitant's age and sex. For the same premium, a shorter life expectancy means a bigger payment. So a 65-year-old man receives more per month than a 65-year-old woman (women live longer), and both receive more than a 45-year-old man (a younger person is expected to collect for many more years).

Tax reminder: taking gains out of a deferred annuity before age 59½ generally means ordinary income tax plus a 10% additional tax on the taxable portion.