What is a Accumulation Stage
The accumulation state of an annuity contract is the period during which an annuitant is making contributions to an annuity contract and / or leaving the money in the contract to grow in value. The accumulation state is also known as the defferred stage of the contract.
SecuritiesCE Explains Accumulation Stage
When an investor elects to purchase an annuity to generate income for some future period in time, usually retirement, the investor’s account will begin to accumulate value through the investor’s contributions to the account and from the growth generated by the account. As the investor makes contributions to the account the value grows. During the accumulation stage of the contract, all of the distributions of growth are reinvested and are used to purchase additional accumulation units. The money in the investor’s account is held in the seperate account of the variable annuity and used to purchase stocks, bonds or mutual fund shares