Common use of Deferred Annuities Clause in Contracts

Deferred Annuities. Deferred annuities typically have two phases, the “accumula- tion” phase and the “distribution” phase. During the accumu- lation phase, your money is invested and has the opportunity to grow on a tax-deferred basis. The second phase is known as the distribution or “an- nuitization” phase. During this phase, you receive either a lump sum or periodic income payments from the insurance company. Like immediate annuities, a deferred annuity in its distribution phase can offer income guaranteed for one life, two lives, or a specified period of time. Types of Deferred Annuities Annuity companies may offer one or all of the types below.