In the accumulation phase, money is added to annuities and allowed to grow income tax deferred. Remember that some annuities may allow more premium(s) to be added to a contract during this phase.
During an annuitization phase the contract is unable to be altered. Annuitization has also been coined as annuicide. There are a few different ways to annuitize a contract. From a high-level you may annuitize:
* Ffor the remainder of person or persons lives,
* For set period of time
* Or a combination of the two.
Different products have different ways to address this. You might have a classic annuity that only allows for annuitization. On the other hand, you might have an annuity with a rider allowing for greater income options without committing annuicide.
I addressed these paragraphs in a previous article.