Life Insurance Information Dictionary

Income Phase Definition

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The Dictionary of Insurance Terms and Definitions

An annuity's existence is divided into two periods: the accumulation phase and the income phase.

An annuity's income phase (a.k.a. annuity phase or payout phase) is the time during which the owner is receiving a pension from the annuity.  during the income phase, the annuity owner no longer pays premiums for the annuity.  Annuity income may continue for a lifetime or a fixed duration or according to some other requirement.

For immediate annuities, the income phase begins immediately.  (Immediate annuities require only a single, vast premium.)  For deferred annuities, the income period may fall whenever the annuity owner elects to end the accumulation phase.

As a rule, the income phase of an annuity persist for the remainder of the annuitant's life.  However, there are alternatives that provide guarantees which may extend the duration of the pension beyond the life of the annuitant.

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