Loma 280 Chapter 10
joint and survivor life annuity
A life annuity that provides periodic income pay-ments to two or more annuitants, and those payments continue until both or all of the annuitants die
life with refund annuity
A life annuity that provides periodic income payments throughout the lifetime of the annuitant and guarantees that at least the purchase price of the annuity will be paid out
separate account
An investment account the insurer maintains separately from its general account to isolate and help manage the funds placed in its variable products.
single-premium immediate annuity (SPIA) contract
An immediate annuity that is purchased with a lump-sum premium payment and provides periodic income payments that begin one annuity period after the annuity is purchased.
individual retirement annuity
An individual deferred annuity that qualifies for favorable federal income tax treatment because it meets the requirements speci-fied in the federal tax laws for individual retirement arrangements.
entire contract provision
An insurance and annuity policy provision that defines the documents that constitute the contract between the insurance company and the policyowner.
period certain
The stated period over which the insurer will make periodic income payments for a period certain annuity.
annuity period
The time span between each of the payments in the series of periodic annuity payments
subaccount
One of several alternative pools of investments to which the owner of a variable life insurance policy or variable annuity allocates the premiums she has paid and the cash values that have accumulated under her policy
surrender value
The accumulated value of a deferred annuity less any surrender charges included in the contract
payout option
The choices an annuity contract owner has as to how the insurer will distribute the funds in an annuity during the payout period.
maturity date
The date on which the insurer begins to make the periodic income payments under an annu-ity contract.
lump-sum distribution
The distribution of the accumulated value of an annuity in a single payment.
period certain annuity
An annuity that is payable for a stated period of time, regardless of whether the annuitant lives or dies.
single-premium annuity
An annuity that is purchased by the payment of a single, lump-sum amount
Roth IRA
An IRA in which contributions are not tax-deductible, but qualified withdrawals are tax-free
traditional IRA
An IRA in which contributions may be tax-deductible and invest-ment earnings are tax-deferred until the funds are withdrawn
periodic fee
An amount charged the owner of an annuity contract at predetermined intervals—for example, every year or every month. It typi-cally compensates the insurer for its administrative expenses
front-end sales charge
An amount charged to an annuity contract owner at the time she pays for the annuity. This compensates the insurer for sales commissions and other expenses associated with acquiring the business.
back-end sales charge
An amount charged to an annuity contract owner when she withdraws money from an contract
death benefit
An amount of money payable to a beneficiary designated by a deferred annuity contract owner if the contract owner dies before the annuity payments begin. Also known as a survivor benefit
fixed period option
An annuity contract payout option under which the insurer makes annuity payments for a specified period of time.
fixed amount option
An annuity contract payout option under which the insurer provides periodic income payments of at least a specified minimum amount for as long a period as the annuity's accumu-lated value will provide, regardless of whether the annuitant lives or dies
payout options provision
An annuity contract provision that lists and describes each of the payout options from which the contract owner may select
payout annuity
An annuity in the payout period
accumulation period
The period between the contract owner's purchase of a deferred annuity and the beginning of the payout period
payee
The person or entity who receives the periodic income pay-ments according to the terms of an annuity contract
contract owner
The person or other entity who owns and exercises all the rights and privileges of an annuity contract.
accumulated value
During a deferred annuity's accumulation period, the amount paid for the deferred annuity, plus the investment earnings, minus the amount of any withdrawals and fees
annuitant
The person whose lifetime is used to determine the amount of benefits payable under an annuity contract.
payout period
The period during which the insurer makes periodic income pay-ments under an annuity contract.
contingent payee
The person or other entity who will receive any remaining annuity payments upon the death of the payee.
withdrawal charge
A charge imposed on the owner of a deferred annuity when the owner withdraws more than a stated percentage of the annuity contract's accumulated value in one year.
surrender charge
A charge typically imposed if a deferred annuity contract is surrendered within a stated number of years after it was purchased
withdrawal provision
A deferred annuity contract provision that gives the con-tract owner the right to withdraw all or part of the contract's accumulated value during the accumulation period
guaranteed minimum accumulation benefit (GMIB)
A variable annuity con-tract feature which guarantees that the accumulated value will be at least a min-imum amount if the contract remains in force for a specified period of time— typically 7 to 10 years.
guaranteed minimum withdrawal benefit (GMWB)
A variable annuity con-tract feature which guarantees that up to a certain percentage of the amount paid into the contract will be available for withdrawals annually during the accumulation period, even if subaccount investments perform poorly.
guaranteed minimum income benefit (GMIB)
A variable annuity contract fea-ture that guarantees a minimum periodic income payment regardless of the annuity's investment performance if the contract remains in force for a speci-fied period of time—typically 7 to 10 years.
guaranteed minimum death benefit (GMDB)
A variable annuity contract fea-ture which guarantees that, if the annuitant dies before periodic income pay-ments begin, the beneficiary will receive at least a stated amount, regardless of the contract's accumulated value at that time.
equity-indexed annuity (EIA)
A type of annuity that offers certain principal and earnings guarantees, but also offers the possibility of additional earnings by linking the contract to a published index
single-premium deferred anuity (SPDA) contract
A deferred annuity that is purchased with a lump-sum premium payment and provides periodic income payments that begin more than one annuity period after the annuity is purchased.
mortality and expense risk (M&E) charge
A fee charged the owner of a vari-able annuity which covers various risks and expenses assumed by the insurer, including the risk involved in providing the annuity death benefit and certain other guarantees.
investment management fee
A fee charged the owner of a variable annuity which covers the costs of managing and operating the investment funds underlying the variable subaccounts.
life annuity with period certain
A life annuity which guarantees that the insurer will make periodic income payments throughout the annuitant's life and guar-antees that the payments will be made for at least a certain period, even if the annuitant dies before the end of that period
straight life annuity
A life annuity which provides periodic income payments for only as long as the annuitant lives.
misstatement of age or sex provision
A life insurance or annuity policy provi-sion that describes the action the insurer will take to adjust the amount of the policy benefit in the event that the age or sex of the insured is incorrectly stated
policy dividend
A life insurance policyowner's or annuity contract owner's share of the divisible surplus
service fee
A one-time fee charged an annuity contract owner for specific services
annuity
A series of periodic payments
fixed subaccount
A subaccount that guarantees payment of a fixed rate of interest for a specified period of time
individual retirement arrangement (IRA)
A tax-deferred savings arrangement that an individual establishes and that meets certain requirements specified in the U.S. federal tax laws.
fixed annuity
An annuity contract under which the insurer guarantees the mini-mum interest rate that will be applied to the annuity's accumulated value dur-ing the accumulation period and the minimum amount of the periodic income payments that will be made during the payout period
fixed amount annuity
An annuity that guarantees the payment of periodic income payments of a specified minimum dollar amount for as long a period as the annuity's accumulated value will provide, regardless of whether the annuitant lives or dies
flexible-premium annuity
An annuity that is purchased by the payment of peri-odic premiums that can vary between a set minimum amount and a set maxi-mum amount.
market value adjusted (MVA) annuity
An annuity that offers multiple guar-antee periods and multiple fixed interest rates.
immediate annuity
An annuity that provides periodic income payments that gen-erally are scheduled to begin one annuity period after the date the contract is issued.
deferred annuity
An annuity under which periodic income payments are sched-uled to begin more than one annuity period after the date on which the annuity was purchased.
variable annuity
An annuity under which the amount of the accumulated value and the amount of the periodic income payments fiuctuate in accordance with the performance of one or more specified investment funds
incontestability provision
An insurance and annuity policy provision that describes the time limit within which the insurer has the right to avoid the con-tract on the ground of material misrepresentation in the application.
free-look provision
An insurance and annuity policy provision that gives the policyowner a stated period of time—usually at least 10 days—after the policy is delivered in which to examine the policy.