During Phase 1 you can make a single, lump sum contribution to your annuity and add to it later, or you have the option to make multiple contributions over a period of time. The assets are accumulated for a greater growth potential.

During Phase 2 you have a choice of how to manage your account to receive your income payments. You can structure your payments adjusting to your other retirement income. You can choose to get the payments for a set period of time or can choose an income for life. This feature is only available in annuities.

All the earnings are tax-deferred. This means that you do not have to pay for taxes on the earnings until you withdraw your money. If the money is withdrawn before phase 2 is reached, (prior to age 59 ½) then there is a 10% federal income tax penalty in addition to paying ordinary income taxes.

There are two types of deferred annuities: Fixed Deferred Annuities and Variable Deferred Annuities.