Generally, the interest rate given an annuity is guaranteed for a minimum of one year, or calendar year. This bonus gives the annuity added value the first year, then the rate comes back down to the base rate the following year.
Some companies also give annuitization bonuses.
These bonuses are given, provided certain conditions are met, during the annuitization payout phase. Generally, to receive this particular bonus your annuity must be in force for a minimum of five years and your payout must be spread out over a minimum of five years. The actual length of the surrender charges are vital in planning out the time frame in which you may desire to start receiving your benefits without penalties. However, if this same individual purchased an annuity that had a 12-year surrender period, he would incur a significant surrender charge. It is not necessary to establish which payout option you may choose until you are reaching the point when you would like to receive your annuity benefits.