Ninety percent or more of annuities are never annuitized, according to Annuity FYI. Annuitization, which is a process that converts an annuity into a series of guaranteed payments, is usually only done when the annuity is underwater, meaning its value is less than the value of the original investment.
Annuitization should also be considered when lifetime income is needed, perhaps in response to a health crisis, or if there are favorable tax consequences, Annuity FYI points out. Some people with no heirs or beneficiaries also annuitize their annuities to take advantage of the greater retirement income. While some annuities offer the option of variable payments, most people annuitizing their annuities opt for a fixed monthly payment.