What does the term "Annuity Phase" refer to in the context of insurance?

The term "Annuity Phase" specifically refers to the payout period during which an annuitant receives income payments from the annuity. This phase occurs after the accumulation phase, where funds are invested and grow. During the annuity phase, the insurer makes regular payments to the annuitant based on the terms of the contract, providing a stream of income, typically in retirement. This structured payment plan is designed to ensure that the individual has financial support over time, making it a critical component of retirement planning.

Understanding this phase is essential for individuals considering annuities as a means to secure their financial future, as it directly impacts how much money they will receive and for how long. In contrast, the other options refer to different aspects of the annuity lifecycle that do not pertain to the actual income distribution phase, such as policy issuance, the initial period of investment, or cancellation terms.