Accumulation and Payout Periods
A deferred payment annuity divides into two phases: the accumulation phase and the payout phase. During the accumulation phase, customers contribute money into the annuity account. As the customer contributes more, the account grows in value. The account will also grow (or shrink) depending on the performance of the securities in the subaccounts. In the second phase, customers stop contributing into the fund and begin receiving payments. This is called the payout or annuitization phase. During this phase, the customer’s assets will be converted into a monthly income stream. The amount of the monthly payments will depend on the performance of the investments in the customer’s separate account, the age and sex of the customer, and on the customer’s choice of pa