An insurance company was approached by a couple who were unclear when to buy an annuity. Ahmed is 70 years old, works as a teacher at a technical academy and wants to retire now. His wife, Noora, is 67 years old works for a tourism agent and sees no motive to give up working as she enjoys her lifestyle. Moreover, she has her own small RRSP (Registered Retirement Savings Plan) funds which is around BD350k and would like to know how to invest it.

Their problem was like one often experienced by singles or couples in their age group. As a start they researched their options, discarding those that made them uneasy. They felt uncomfortable in moving their money into an immediate fund.

1. Identify the Immediate and the deferred annuity using your own words, provide an example on each?