Variable annuitization is the option of receiving payments from an annuity during the annuitization phase based on the performance of annuity investments have performed. This is an alternative to a fixed annuity, in which the payment amount stays the same throughout the annuitization period.
The benefit of a variable annuitization is that the policyholder can receive higher payments if the investments from the annuity do well. However, if the investments perform poorly, then the payments could be lower. Often, people are willing to take more risks in order to potentially reap more rewards, and this type of annuitization allows for it.
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