Chapter 11 Flashcards
Annuity
A periodic payment to begin at a specified or contingent date and to continue for a fixed period or for the duration of a designated life or lives
Annuitant
The person whose life governs the duration of benefit payments under a life annuity: usually also the person who receives periodic annuity payments
Annuity Certain
An annuity with benefit payments that continue for a definite period of time without being linked to the duration of a specified human life
Life (Whole Life) Annuity
An annuity whose benefit payments continue for the duration of a designated life
Temporary life Annuity
An annuity whose benefit payments continue until the earlier of the death of a designated person or the end of a specified period of time
Joint-Life Annuity
An annuity with benefit payments that continue only until the first death among specified lives
Joint-and-Last Survivor Annuity
An annuity with benefit payments that continue until the last death among specified lives
Immediate Annuity
An annuity with benefit payments that begin one payment interval (for example, 1 month) after the date of purchase
Deferred Annuity
An annuity for which benefit payments begin more that one payment interval after the date of purchase
Accumulation Period
The period of time in a deferred annuity during which the purchase price is deposited with the insurer and accumulated at interest
Liquidation Period
The period of time which annuity benefit payments are made
Pure (Straight Life) Annuity
A life annuity that provides no guaranteed minimum number of benefit payments or refund of the purchase price. Also known as a pure annuity
Refund Annuity
A life annuity that promises to return in some manner a portion or all of the purchase price
Fixed Annuity
An annuity that provides a stated periodic dollar benefit, regardless of the insurer’s investment return
Variable Annuity
An annuity with benefit payments that very depending on the performance of selected blocks on the insurer’s invested assets
Life Annuity Certain
A life annuity that provides a guaranteed minimum number of benefit payments whether the annuitant lives or dies. It is a combination of annuity certain and a pure deferred life annuity.
Installment Refund Annuity
A refund annuity specifying that if the annuitant dies before receiving total benefit payments equal to the purchase price of the annuity, the difference will be refunded in the form of continuing benefit payments
Cash Refund Annuity
A refund annuity that specifies if the annuitant dies before receiving total benefit payments equal to the purchase price of the annuity, all or a stated percentage of the difference will be refunded in cash
50% Refund Annuity
A refund annuity that pays a benefit to a beneficiary if the annuitant dies before receiving benefits equal to half the cost of the annuity. Installments continue until the total benefits paid equal half the cost of the annuity.
Cash Option
An option the allows an annuitant, at the start of the liquidation period, to withdraw the funds in cash, rather than as an annuity
Accumulation Unit
A unit or a variable annuity that is purchased during the annuity’s accumulation stage. Units are revalued each month
Annuity Unit
A variable annuity’s accumulation units are converted to a fixed number of annuity units at the beginning of the liquidation period. The dollar value of each unit fluctuates with the investment performance of the separate account underlying the annuity
Equity Indexed Annuity
An annuity that guarantees a minimum fixed rate of interest credits but also provides higher credits if a specified common stock index rises sufficiently
Structured Settlement
An agreement to pay a specified set or periodic benefits in lieu of (or in addition to) a sing lump-sum amount
