Accumulation Period vs. Liquidation Period

Another key term that you should be familiar with when exploring fixed annuities is the accumulation and liquidation periods of the annuity.  The concepts are quite simple and don't need extensive explanation.

The accumulation period comes into play with deferred annuities.  The accumulation period refers to the time that the annuitant or investor deposits money with the insurance company.  This period covers the time spent funding the annuity.

The liquidation period simply refers to the period of time in which the payments are made by the insurer to the investor.  The insurer begins to "liquidate" the annuity's funds to the designated recipient.