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variable annuity > definitions > Flashcards

definitions Flashcards

1
Q

period during which contributions are made to an annuity

A

accumulation phase

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2
Q

an accounting measure, similar to a mutual fund share, used to determine an annuitant’s proportionate interest in the insurer’s separate account during the accumulation phase of a variable annuity.

A

accumulation unit

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3
Q

under an insurance or annuity contract, the charge the insurance company makes to compensate for maintaining records, accounting and reports generation.

A

administration charge

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4
Q

a person who receives the distribution from an annuity contract

A

annuitant

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5
Q

a contact in which the insurer agrees, for a price, to make regular payments to an individual for life or some fixed period.

A

annuity

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6
Q

the period, after annuitization, during which annuity payments are made to an annuitant.

A

annuity phase

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7
Q

an accounting measure used to determine the amount of each payment to the annuitant during the annuity payout phase of a variable annuity.

A

annuity unit

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8
Q

an assumption, built into variable annuity contracts, of the minimum rate of return the insurer expects to receive and which forms the basis for an initial annuity payments as well as a “floor” from which to measure gain.

A

assumed interest rate (air)

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9
Q

an annuity providing for payments that derive from both fixed and variable annuity acounts.

A

combined annuity (or balanced)

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10
Q

an amount equal to the higher of the separate account balance or the sum of the purchase payments which is paid to the beneficiary of a variable annuitant in the event of their death during the accumulation phase.

A

death benefit guarantee (VA)

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11
Q

an annuity in which payments begin more than one payment period (one month to one year) after the purchase date.

A

deferred annuity

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12
Q

an approach to managing a variable products separate account that utilizes an open-ended investment company created inside the structure of an insurer.

A

direct method

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13
Q

an investing technique characterized by buying a variety of different investments so that the market risk is spread out and reduced.

A

diversification

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14
Q

a guarantee made by an insurer that expenses for a variable product will not exceed certain maximum levels.

A

expense guarantee

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15
Q

an insurance or annuity settlement option in which a chosen amount is paid out for an approximate length of time when principal and interest are exhausted

A

fixed amount option

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16
Q

an annuity providing that the insurer will pay the annuitant a guaranteed, fixed amount during annuity phase.

A

fixed annuity

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17
Q

an insurance or annuity settlement option in which an approximate amount is paid out for a chosen length of time when principal and interest is exhausted.

A

fixed period option

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18
Q

a deferred annuity purchased with a series of payments which may be irregular as to amount or timing

A

flexible premium deferred annuity

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19
Q

a type of life insurance, also known as variable universal life, which is characterized by flexible premiums, adjustable death benefit, and the ability of the owner to make partial surrenders.

A

flexible premium variable life

20
Q

the account that holds all of the assets of an insurer other than those in the separate accounts.

A

general account

21
Q

an investment objective that focuses on long term capital appreciation rather than immediate income.

A

growth

22
Q

an annuity, purchased with a single premium payment, in which annuity payments begin the next period after purchase.

A

immediate annuity

23
Q

an investment objective that focuses on dividends and interest to produce income rather than capital appreciation.

A

income

24
Q

an approach to managing a variable products separate account that uses a unit investment trust contract with an investment company external to the insurer.

A

indirect method

25
Q

an insurance or annuity settlement option in which the insurer holds the principal and pays interest to the beneficiary with a guaranteed minimum rate.

A

interest only option

26
Q

a federal statute requiring insurer separate accounts to be registered as investment companies with the securities industry.

A

investment company act of 1940

27
Q

with a variable life insurance or variable annuity contract, this is the amount paid to an investment advisor for priding professional investment advice for an insurer separate account.

A

investment management fee

28
Q

an insurance or annuity settlement option in which payments continue for as long as both of the two annuitants are living.

A

joint life income

29
Q

an insurance or annuity settlement option in which payments continue for as long as either of two annuitants are living

A

joint and survivor life income

30
Q

an insurance or annuity settlement option in which payments are based on mortality and interest calculations and continue for as long as the annuitant lives.

A

life income

31
Q

an insurance and annuity settlement option in which payments continue to the longer of the life of the annuitant or the selected certain period.

A

life income with period certain

32
Q

the initial face amount of a variable life policy which is guaranteed to be paid to a named beneficiary so long as the scheduled premiums are paid regardless of the performance of the separate account.

A

minimum guaranteed death benefit

33
Q

a basic settlement option guaranteed which promises the insurer will continue annutized payments for as long as the annuitant lives, even beyond mortality data life expectancy.

A

mortality guarantee

34
Q

an annuity and cash value life insurance guarantee that the contract owner will not lose the surrender value of the contract should they stop making payments prior to annuitization or death.

A

nonforfeiture guarantee

35
Q

a detailed summary of the sec registration statement for a security which must be provided to the prospect for any variable product sale.

A

prospectus

36
Q

an insurance or annuity settlement option in which payments continue to the longer of the life of the annuitant or until the original principal is paid out.

A

refund option

37
Q

the account containing the investments supporting any variable annuity or variable life insurance contracts of an insurer.

A

separate account

38
Q

a deferred annuity created with a single purchase agreement

A

single payment deferred annuity

39
Q

an investment portfolio, often similar to a mutual fund, within the separate account.

A

sub account

40
Q

an nasd principal requiring the agent in a variable products presentation to make a conscientious inquiry into the prospect’s insurance product needs, financial circumstances, objectives and investment attitudes before consummating the sale.

A

suitability requirements

41
Q

with flexible premium products, this is the premium calculated by the insurer’s actuaries which will maintain the death benefit for the entire life of the insured.

A

target premiums

42
Q

an annuity used is an irs qualified retirement plan such as the 403b plan for the employees of public schools, etc.

A

tax sheltered annuity

43
Q

a type of life insurance characterized by flexible premiums, an adjustable death benefit and cash values which may be accumulated on either a fixed or variable basis.

A

universal life insurance

44
Q

for variable products the valuation of the separate account must be performed daily excepting weekends and national holidays and be based on the market value of the underlying securities in the account.

A

valuation

45
Q

an annuity contract in which the account value is maintained in a separate account in which the portfolio choices are made by the owner of the annuity.

A

variable annuity

46
Q

with fixed premium variable life insurance, this is an additional death benefit which may result from the positive performance of the separate account.

A

variable death benefit

variable annuity (2 decks)

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