Variable Annuitization

What Does Variable Annuitization Mean?

Variable annuitization is the option to receive payments from an annuity during the annuitization phase based on the performance of the underlying investments. This is an alternative to a fixed annuity, where the payment amount remains the same throughout the annuitization period.

Insuranceopedia Explains Variable Annuitization

The benefit of variable annuitization is that the policyholder can receive higher payments if the investments underlying the annuity perform well. However, if the investments perform poorly, the payments could be lower. Many people are willing to take on more risk in the hopes of receiving greater rewards, and this type of annuitization allows them to do so.