If you are the recipient of a settlement or annuity contract, you likely want to know the exact definition of an annuity date. 

An annuity date is the first date you will receive payments from an annuity investment or settlement. If you have never owned an annuity, you have likely not given much thought to the definition of an annuity date. However, if you are waiting for payments to begin from an annuity, you likely want to know precisely when they will commence. 

Learn more about annuity dates and other key annuity terms in this guide. 

What Does ‘Annuity Date’ Mean? 

An annuity date is the day the recipient of an annuity settlement or contract will start receiving payments. The annuity contract outlines the first payment, gives the frequency of payments, and when the company will issue each subsequent payment. 

What is an Annuity? 

Annuities are payments that a company structures or pays out regularly. Typically, insurance companies sell annuities and handle the payments according to the investment contract.

There are several types of investment annuities, including: 

• Immediate Annuities – Start paying out as soon as you make the initial investment. 
• Deferred Annuities – Payments and taxes are deferred until a later specified date. 
• Fixed Annuities – Investments that pay out a fixed amount. 
• Variable Annuities – Payments vary depending on performance. 
• Fixed-Indexed Annuities – Tied to a stock index, payments vary depending on stock performance. 
• Annuity Settlement – An advancement of structured settlement payments. 

However, you can also receive an annuity for a structured settlement. Annuity settlements are typically an advancement of some or part of your future annuity payments. 

How Does an Annuity Date Impact Owners? 

The contract start date can be significant depending on your purpose for purchasing an annuity. Like mutual funds, annuities can be a profitable long-term investment that provides financial security. If you purchase an annuity for your retirement portfolio, you will likely want to wait to pay taxes until you retire and start receiving regular annuity payments. So, a deferred annuity would be a good choice.

As a recipient of an annuity settlement based on a structured settlement, you may be living without a job or source of income. Therefore the date you will start receiving funds is significant. If you own a variable or fixed-indexed annuity, the commencement date marks the beginning of the regular payments. However, the payout amount differs depending on the asset’s profitability. 

No matter what type you own, the annuity date is the day you will start receiving routine payments per your annuity contract. If you are nearing retirement age, it may be important for your financial health to purchase investments that start paying you as soon as you retire, so you have a regular source of income to help you pay for things like your home mortgage, credit card bills, and car payments. If you need assistance choosing the correct annuity date, a financial advisor can explain the advantages and disadvantages of each. 

Other Key Annuity Terms

If you plan on buying an annuity or you are the recipient of a structured settlement, there are a few other terms you should know, like: 

• Surrender Charge – A fee charged to someone who owns a tax-deferred annuity type that does not require the payment of tax on investment gains until the owner starts receiving payments. 
• Renewal Rate – The renewal rate is the rate of return you can expect to receive after the initial investment return period is complete. 
• Premium – The fee charged for ownership of an annuity. 
• Income for Life Annuity – When you purchase an income for life annuity, it pays out a fixed or variable amount at regular intervals for the annuitant’s life. 
• Income for Life of Two Annuity – An annuity pays out over two annuitants’ lives. 
• Beneficiary – The individual or individuals that will receive payments from an annuity.

Final Thoughts on What is an Annuity Date

The annuity date refers to the date that an owner will receive their first payment regardless of the type of annuity for which they are a beneficiary. After the initial payment, the subsequent payouts will follow the schedule provided in the contract you sign when you purchase or agree to the annuity. 

For help with other estate planning and investment topics, like whether or not an estate can file for bankruptcy, read the other guides on our site.