An immediate annuity is a financial product that provides regular payments to an individual, starting almost immediately after a lump sum payment is made. This type of annuity is often purchased by retirees seeking a steady income stream to cover living expenses. The payments from an immediate annuity can be structured in various ways, such as for a fixed period or for the lifetime of the annuitant. This allows individuals to choose a plan that best fits their financial needs and goals, providing peace of mind during retirement.