What period refers to when accumulated value in an annuity is paid out?

The annuitization phase is the period during which the accumulated value in an annuity is converted into periodic payout benefits to the annuitant. This phase typically follows the accumulation phase, where funds are deposited and grow over time. During the annuitization phase, the insurance company will determine how long the payouts will continue based on the terms of the annuity, such as whether the payments are for a fixed period or for the lifetime of the annuitant. This ensures that the annuitant receives a reliable income stream, which can be particularly valuable during retirement.

In contrast, the accumulation phase is focused on building the value of the annuity before any payouts begin, while terms like pre-annuity phase and disbursement phase do not specifically define the stage where income payments are calculated and distributed. Thus, understanding the significance of the annuitization phase is key in the context of how annuities function as a financial product.