Which of the following would NOT be appropriate for an immediate annuity?

An immediate annuity is designed to start payments to the annuitant almost immediately after a lump sum is paid, typically within a year. It is most appropriate for individuals seeking a guaranteed income stream right away, such as those who have received a windfall and want to ensure a consistent cash flow.

The scenario involving a parent saving for a child's college is less suitable for an immediate annuity because this situation usually implies a longer time horizon where the parent needs to accumulate funds over a period, rather than beginning to withdraw funds immediately. People saving for long-term goals usually prefer investment vehicles that allow their money to grow before they begin tapping into it, which contrasts with the immediate nature of an immediate annuity.

In contrast, beneficiaries collecting life insurance benefits, lottery winners opting for lump-sum payments, or individuals who have just won a large settlement are all in positions where they have received a significant sum of money and need to consider immediate income options.