When an insurance company begins paying out the proceeds of an annuity on a monthly basis, the annuity is said to be annuitizing, and the process is called annuitization.

Do not annuitize without careful thought. Once an annuity is annuitized, you cannot reverse the annuitization or withdraw funds within the annuity. Annuitization effectively exchanges the cash in the annuity for a guaranteed but inflexible income stream.

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