definitions

Question 1

period during which contributions are made to an annuity

Answer 1

accumulation phase

Question 2

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.

Answer 2

accumulation unit

Question 3

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

Answer 3

administration charge

Question 4

a person who receives the distribution from an annuity contract

Answer 4

annuitant

Question 5

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

Answer 5

annuity

Question 6

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

Answer 6

annuity phase

Question 7

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

Answer 7

annuity unit

Question 8

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.

Answer 8

assumed interest rate (air)

Question 9

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

Answer 9

combined annuity (or balanced)

Question 10

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.

Answer 10

death benefit guarantee (VA)

Question 11

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

Answer 11

deferred annuity

Question 12

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

Answer 12

direct method

Question 13

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

Answer 13

diversification

Question 14

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

Answer 14

expense guarantee

Question 15

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

Answer 15

fixed amount option

Question 16

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

Answer 16

fixed annuity

Question 17

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.

Answer 17

fixed period option

Question 18

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

Answer 18

flexible premium deferred annuity

Question 19

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.

Answer 19

flexible premium variable life

Question 20

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

Answer 20

general account

Question 21

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

Answer 21

growth

Question 22

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

Answer 22

immediate annuity

Question 23

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

Answer 23

income

Question 24

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

Answer 24

indirect method

Question 25

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

Answer 25

interest only option

Question 26

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

Answer 26

investment company act of 1940

Question 27

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.

Answer 27

investment management fee

Question 28

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

Answer 28

joint life income

Question 29

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

Answer 29

joint and survivor life income

Question 30

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.

Answer 30

life income

Question 31

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

Answer 31

life income with period certain

Question 32

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.

Answer 32

minimum guaranteed death benefit

Question 33

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.

Answer 33

mortality guarantee

Question 34

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.

Answer 34

nonforfeiture guarantee

Question 35

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

Answer 35

prospectus

Question 36

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.

Answer 36

refund option

Question 37

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

Answer 37

separate account

Question 38

a deferred annuity created with a single purchase agreement

Answer 38

single payment deferred annuity

Question 39

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

Answer 39

sub account

Question 40

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.

Answer 40

suitability requirements

Question 41

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.

Answer 41

target premiums

Question 42

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

Answer 42

tax sheltered annuity

Question 43

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.

Answer 43

universal life insurance

Question 44

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.

Answer 44

valuation

Question 45

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.

Answer 45

variable annuity

Question 46

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

Answer 46

variable death benefit