After how long does a deferred annuity begin to make pay-outs following its purchase?

A deferred annuity is designed to accumulate funds over a specified period before the contract begins to make periodic payouts to the annuitant. This accumulation phase allows the invested funds to grow, often tax-deferred, until the individual decides to start receiving income from the annuity.

Typically, the waiting period before distributions begin for a deferred annuity is a minimum of one year. While the specifics can vary depending on the terms set by the insurance company and the type of annuity purchased, most deferred annuities typically start to provide payouts after a minimum of 12 months. This aligns with common practices in the insurance industry regarding how these products are structured.

In essence, the correct answer reflects the standard waiting period for deferred annuities, confirming that they are not designed for immediate payouts.