What is an Annuity Date?
What is the annuity date? The annuity date is also known as the annuity commencement date is the day on which annuities are payable. This means that annuity payments will be made on this day every year until the annuitant passes away. Annuitants often receive a regular income from annuities, and annuity dates are important to keep track of for them!
Understanding the Annuity Date
An annuity date is the day that you will start to receive money from an annuity. To get a guaranteed monthly income, you can convert an annuity through an irreversible process called annuitization.
When the annuity commencement date has arrived, the annuity will automatically be annuitized. If an insurance company annuitizes an annuity, they will give you monthly payments for a certain amount of time or for a person’s lifetime.
When annuitize an annuity, the money cannot be turned back into a lump sum, and the asset is no longer yours. The insurance company will contact the annuitant before the annuity commencement date to make sure that it is still what they want.
The people who have an annuity will often roll it over if they don’t need the money it provides.
Most people don’t annuitize their annuity.
An annuity avoids the probate process under most circumstances. If someone dies, this means that the annuity’s death benefit can be given to their family quickly.
Annuities Types That Use Annuity Dates
Annuity commencement dates are applicable to annuity plans that require annuitization. Those annuities are:
- Immediate annuities
- Deferred income annuities (DIA)
- QLACs
- Longevity annuities
- Medicaid annuities
- Two-tier annuities
- Structured settlements
- Lottery annuities
- Pension plans
- Secondary market annuities
- Charitable gift annuities
Annuities Types That Do Not Use Annuity Dates
Since most annuity owners do not annuitize their contracts, annuity commencement dates don’t apply much. Instead, owners utilize the lifetime income rider to generate a guaranteed income for life or penalty-free withdrawals to take money from the annuity account periodically. Those annuities are:
- Fixed annuities
- Fixed index annuities
- Variable annuities
- Registered linked annuities
- Long term care annuities
What Do My Beneficiaries Receive When I Die?
If the annuity owner dies before the annuity date, the annuity’s balance will be provided to beneficiaries. If the owner dies after the annuity date, the beneficiaries may or may not receive a death benefit depending on the payout selected by the owner.
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