What is typically a characteristic of immediate annuities?

Immediate annuities are designed to provide income shortly after they are purchased. This characteristic is a fundamental aspect of immediate annuities, differentiating them from deferred annuities, where payments begin at a later date. When an individual purchases an immediate annuity, they exchange a lump sum for regular income, which typically starts within a month or one payment cycle after the purchase. This structure serves the needs of those seeking a reliable income stream right away, such as retirees who need to access funds for living expenses.

The options that describe other scenarios do not align with the defining features of immediate annuities. For instance, payments starting after five years (which would be characteristic of deferred annuities), payments based solely on life expectancy (which could be a feature of some types of annuities but is not exclusive to immediate annuities), and payments for only a specified term (which can apply to certain annuity structures but does not represent the essence of immediate annuities) highlight different types of annuity products rather than the immediate annuity itself. Therefore, the aspect of payments beginning shortly after purchase clearly reinforces the correct answer.