YOU ASK:
What is the definition of Payout Options?
WE ANSWER:
Payout Options are methods that an annuitant can select as to how he will receive the accumulated value of the annuity.
The payout options include the following:
- Fixed period option: the accumulated value is paid out on installment basis over a period of time specified in the annuity
- Lump sum distribution option: the annuitant receives the balance in one payment.
- Life annuity option: the annuitant receives regular payments of a specified amount as long as the annuitant lives. One variation of this is a joint and survivor annuity, where the payments last for as long as one of two partners lives.
- Fixed amount option: the annuitant receives a fixed amount every month (or at specified intervals) until the annuity's accumulated value is exhausted.
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