During the liquidation phase of an annuity, what does the annuitant typically receive?

During the liquidation phase of an annuity, the annuitant typically receives benefit payments at regular intervals. This phase is designed to provide a steady income stream to the annuitant, often tailored to their specific needs, which can be set up as monthly, quarterly, or annual payments. The primary purpose of this phase is to convert the accumulated value of the annuity into a predictable income source for the duration of the annuitant's life or a specified period.

Receiving benefit payments at regular intervals helps the annuitant manage their budget and expenses more effectively, as it provides a consistent cash flow. This method also allows for the balancing of financial needs against the longevity of the annuity investment.

Other options, such as a lump-sum payment, although possible in certain circumstances, do not represent the standard structure of the liquidation phase for most annuities, which focus on regular income distributions. Higher fixed interest returns are generally associated with the accumulation phase prior to liquidation, and tax-free withdrawals can occur under specific conditions but are not the standard outcome of the liquidation process. Thus, regular benefit payments align with the fundamental purpose of annuities during this phase.