Final answer:
The term used to define the period of time during which an annuitant makes payments into an annuity is called the accumulation phase. During this phase, the annuitant contributes funds to the annuity account, which then grows through investment earnings.
Step-by-step explanation:
The term used to define the period of time during which an annuitant makes payments into an annuity is called the accumulation phase.
During the accumulation phase, the annuitant contributes funds to the annuity account, which then grows through investment earnings. This phase typically lasts for several years or even decades, depending on the individual's financial goals and timeline. For example, let's say John plans to retire at the age of 65 and wants to build up a retirement nest egg through an annuity. He starts making regular payments into the annuity account when he is 45 years old. During the accumulation phase, his contributions, along with any investment gains, add up to a larger sum of money that will provide him with income during the distribution phase of the annuity when he retires.