What option allows an annuitant to cash out the annuity instead of receiving periodic payments?

The option that allows an annuitant to cash out the annuity instead of receiving periodic payments is a lump sum payment. This choice provides the annuitant with the flexibility to withdraw the entire amount accumulated in the annuity at one time, rather than over a series of payments.

This can be beneficial for individuals who may need a large sum of money for unforeseen expenses or who prefer to manage their investments independently. In many cases, opting for a lump sum may have tax implications, and it is essential for the annuitant to be aware of any potential charges or penalties that may apply due to early withdrawal, depending on the terms of the annuity contract.

In contrast, immediate withdrawal typically refers to taking out funds from the annuity without waiting for a specific period, and while it involves liquidity, it does not necessarily equate to cashing out the full value of the annuity like a lump sum payment does. Flexible premium contributions relate to the ability to make varying payments into the annuity, while deferred payment refers to the postponement of payouts until a designated time, rather than a cash-out option.