Annuitization Options

Published: | Updated: November 25, 2017

Definition - What does Annuitization Options mean?

Annuitization options are the ways the owner of an annuity can get paid by the insurance company after the accumulation phase has ended. The preferred payout method often becomes the annuitant's source of income after retirement.

These are also called annuity payout options.

Insuranceopedia explains Annuitization Options

The two general options are scheduled withdrawal and lump sum. The first options allows the annuitant to collect monthly payouts, which are divided up according to the annuitant's life expectancy. The second option provides the annuitant with a single payment for the total amount they are entitled to collect. This latter option is usually chosen if they need the funds for an emergency or want to invest it elsewhere.

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