What is the definition of Annuity Accumulation Phase or Period?
The Annuity Accumulation Phase or Period is the time by which the annuity owner makes his payments so as to build up the annuity value. This phase is used for deferred annuities. When this phase is over, the annuity payments start. During the annuity accumulation phase, the investor decides as to how the payments will be spread apart and used in a number of investments. He may also transfer funds from one investment vehicle to another without having to pay for capital gains or income taxes. The annuity accumulation phase is important since this has an impact on the amount of annuity payments he will get when these payments start. The fact that the investor also has the option to move funds from one investment to the other will also affect the amount of annuity payments as well.
