What event triggers a deferred annuity to start making benefit payments to the annuitant?

A deferred annuity begins making benefit payments to the annuitant when the contract is annuitized. This process converts the accumulated value of the annuity into a stream of periodic payments, which can be structured to last for a specific period, for the lifetime of the annuitant, or in a variety of other ways depending on the terms of the contract.

Annuitization represents a crucial stage in the lifecycle of an annuity because it is at this point that the insurer starts disbursing funds to the annuitant based on the terms previously agreed upon in the contract. Prior to annuitization, the funds remain invested and grow tax-deferred, but they are not yet generating income for the annuitant.

Other options, such as reaching retirement age, applying for benefits, or the annuitant's death, do not directly trigger benefit payments. The start of payments is solely dependent on the annuitization process itself, which is a distinct and necessary step after the accumulation phase of the annuity.