Accumulation Period

Definition - What does Accumulation Period mean?

The accumulation period, in the context of insurance, refers to the time period during which an annuitant pays money into their annuity account, as a way of investing in a form of retirement savings. After this phase, annuitization or regular payouts from the annuity to the annuitant generally follows until the annuitant's death or a specified period.

Insuranceopedia explains Accumulation Period

An insurance product meant for retirement planning, annuities provide a steady income in the later years of one's life and help alleviate fears of running out of assets during retirement. The longer one pays into an annuity, the greater the payouts will be once they begin. Moreover, annuities can be structured in various ways, besides the length of the accumulation period, such as the structure of payouts, whether they come in installments or a lump sum; the length of time payouts are received; and whether they are fixed or variable, in other words, the same amount every time or dependent on the investments' performance.

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