What is annuitization period

What Is the Annuitization Phase? The annuitization phase of an annuity refers to the period when the owner of an annuity—called the annuitant—begins to receive payments from the annuity investment. Annuities are financial products that pay the recipient a stream of payments over a period of time.

How long is the annuitization period?

In most cases, you can choose a period ranging from 5 years to 30 years with a period certain annuity. If you die before the end of the fixed period, the payments continue to pay your designated beneficiary until the period is up.

What happens when you annuitize?

Annuitization means converting the lump sum premium used to purchase an annuity into a stream of income payments. This is usually a permanent process in which the annuity owner elects to receive regular income payments according to the schedule outlined in their annuity contract.

Is it a good idea to annuitize an annuity?

While annuitization provides a retirement income stream that annuity owners can't outlive, long-term consequences need to be taken into account. Annuitization is generally a good choice for those who expect to live much longer than their projected statistical lifespan.

What is annuity period mean?

The annuity period is the time when an annuity actually pays out to an annuity holder through annuitization. The annuity period can last a specific amount of time, or it can last for the rest of a person's life.