chapter 9 Flashcards
time during which funds are being paid into the annuity
accumulation period
refers to the point at which the annuity ceases to be an accumulation vehicle and begins to generate benefit payments regularly
payout or annuity period
allows the annuity owner to surrender the annuity without surrender charges if interest rates fall below a stated level within a specified time period
bailout provision
type of fixed annuity that offer the potential for higher credited rates of return than their traditional counterparts but also guarantee the owner’s principal
Equity indexed annuities (EIA)
annuity’s interest rate is guaranteed fixed if the contract is held for the period specified in the policy
Market value adjusted (MVA)
shift the investment risk from the insurer to the contract owner
variable annuities
designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase
immediate annuity
accumulate interest earnings on a tax-deferred basis and provide income payments at some specified future date
deferred anuities
pays the annuitant a guaranteed income for the annuitant’s lifetime
A straight life income annuity
payout approach is designed to pay the annuitant an income for life but guarantees a definite minimum period of payments
life with certain period
based on non-guaranteed equity investments (such as common stock)
variable annuitiy
based on non-guaranteed equity investments (such as common stock)
principal
describes an annuity owner making multiple premium payments to accumulate principal. Typically, after the initial premium, these payments are flexible with frequency and amount.
Periodic Payment Annuity (Flexible Premium)
income option that guarantees a definite minimum period of payments. IE: 10 years.
period certain annuity
not tax-qualified, in other words contributions are made in after-tax dollars.
non-qualified annuity
