Annuity payout option is the election an owner or beneficiary makes for how annuity benefits will be distributed, such as life-only income, life with period certain, joint and survivor, period certain only, or lump sum. Payout options determine the duration of payments, whether they continue after death, and how much income is received each period. Life-contingent options maximize longevity protection but may leave no residual value if death occurs early, while period-certain or lump-sum options favor liquidity and legacy. Payout choices also influence taxation, especially for qualified annuities subject to required minimum distributions.

Advisors help clients and beneficiaries choose annuity payout options by mapping them to goals such as lifetime income, spousal protection, or estate preservation. They model payment amounts under different options and explain the tradeoffs between maximum income and leaving principal for heirs. For married clients, joint and survivor options often support both spouses, while single clients may combine life-with-period-certain options to protect against early death. Advisors also ensure that payout selections comply with plan rules and regulatory timelines. Understanding annuity payout options allows advisors to turn static account values into customized income plans that fit each clientTMs risk tolerance and family situation.