Definition
The annuity date is the contractually specified date on which a deferred annuity is scheduled to begin making income payments unless the contract owner elects otherwise, marking the transition from the accumulation phase to the distribution phase.
Why it matters
The annuity date is the contract's default income commencement date. Knowing the annuity date is what allows an individual to anticipate when the contract is scheduled to convert to income, and to make any election to defer or accelerate that conversion in advance.
How it works
The annuity date is set at contract issue and is specified in the contract. Common annuity dates are tied to the contract owner's age — typically a date corresponding to a specified age such as 90 or 95 — though some contracts use a fixed period from issue or a specific calendar date. On the annuity date, the contract is scheduled to begin paying income under the contract's default payout structure, unless the contract owner has elected an alternative payout structure or elected to defer the annuity date. The contract typically permits the owner to elect annuitization earlier than the annuity date (often subject to a minimum holding period) and to defer the annuity date to a later age (often subject to a maximum age set by tax regulation or by the contract). On a deferred income annuity (DIA), the annuity date is more typically called the income start date and is the central pricing variable of the contract; on traditional deferred annuities, the annuity date is more often a default that the contract owner is expected to manage actively rather than reach passively.
In practice
For an individual holding a deferred annuity, the annuity date is the default conversion date the contract has set. Decisions about whether to annuitize at the annuity date, earlier, or later are made by election rather than by default in most cases. A professional should be able to identify the annuity date for the specific contract under review and characterize the available election windows around it.
In the Longevity Standard Framework
Annuity date is supporting vocabulary in the Longevity Standard framework — it is the contract's default transition point from the provisional accumulation-phase claim profile to the fully operative distribution-phase claim profile. At the annuity date (or the elected alternative), the contract's claim profile becomes fully fixed and the realized value the contract delivers becomes calculable against the frictionless pool benchmark; the cost-of-income comparison the framework produces is anchored at this transition.
Related terms
- Accumulation phase
- Distribution phase
- Annuitization
- Deferred income annuity (DIA)
- Income start date
- Contract anniversary
- Owner versus annuitant distinction