What type of annuity allows the initial payment to be deferred for a period of time?

A deferred annuity is a financial product where payments begin after a specified period, allowing the initial payment to be postponed. This structure is beneficial for individuals who anticipate needing income at a future date rather than immediately.

For example, in a deferred annuity, the investor might choose to make contributions or purchase the contract now, but the disbursements do not start until a future time. This is distinct from ordinary annuities, wherein payments are made at regular intervals starting immediately after the investment is made, and annuities due, where payments begin at the start of each period. Similarly, a perpetuity represents an indefinite series of cash flows with no end point, making it fundamentally different from the concept of deferring payments.

In essence, the defining characteristic of a deferred annuity is its design to accommodate individuals who want to delay their cash flow until a later date, making it the correct answer in this context.