Annuity Phase

Annuity Phase or Income Phase is the second stage in annuities wherein a client starts to receive his accumulated income. The manner of payment ranges from bi-monthly, monthly, quarterly, semi-annually and annually. There are also different kinds of payment terms. There are lifetime payment, lifetime payment over a certain period, lifetime with a refund, and income over a certain period.

Lifetime income payment, as the phrase obviously suggests, involves an income stream that lasts as long as the client lives. The payment only stops when the client dies. Lifetime payment over a certain period, on the other hand, continues to deliver an income stream to the client's dependents in case she dies before the payment period ends. Clients have the option between periods of 5, 10, 15 and 20 years.

Lifetime with a refund payment pays the income for a client's lifetime, with the insurance company giving in lump sump the balance of the account value to the client's beneficiaries once she dies. Lastly, income for a specific term provides an income stream for a set of years, wherein the client's beneficiaries receive the balance of the account when she dies before the set ends.

These payment terms are designed to meet the different qualifications and needs of annuity contract purchasers. The variations mainly lie on the clients' risk tolerance and management, the ability of clients to decide which manner is best to evenly maximize their wealth throughout their and their loved ones' existence.