Fixed Annuities

current declared rate

One of two interest rate levels for fixed annuity. based on insurer's investment results on economic climate and can change periodically.

guaranteed minimum rate

One of two interest rate levels for fixed annuity. usually low and extends for the life of the contract.

fixed annuity

a contract in which insurer guarantees both the annuity principal and a specified rate of interest to be credited to the contract. A guarantee on interest rate because premiums are invested.

insurer general account

death benefit

insurer general account

fixed level of lifelong annuitized payments

Two-Tiered Fixed Annuities

higher level of interest crediting than most fixed annuities. owner keeps the product and chooses to annuitize it. lower rate is applied if owner surrenders and takes the value in a lump sum instead of annuitizing. lower rate of interest is applied back to when the date of the contract was bought.

insurer general account

minimum interest rates

Fixed Annuity Annuitization

once annuitized the funds are converted into periodic payments. Divide the accumulated funds by the annuity purchase rate or on-going income that $1,000 of the contract value buys.

insurer general account

principal protection

annuity purchase rate

the amount a fixed annuity could provide per $1,00 of accumulate value under a straight life payout option.

general account

where the insurance company maintains the funds that support its fixed life insurance and annuity products. This account allows the insurer to guarantee interest returns on it's fixed insurance and annuity products.

fixed deferred annuities

retirement annuities that have a fixed or flexible premium. guarantee min rate of interest to be credited to the account over a period of time. the contract will never be discredited to anything less than the guaranteed interest rate.

Fixed Annuity Death Benefits

the death benefit equals the contract's accumulated value when the death occurs. Total Premiums paid into policy+ Credited interest earnings-Withdrawals and Contract Charges. These benefits are NOT taxed free. Beneficiary's will be taxed based on the sum of premiums paid into and if that exceeds, that will be taxed.

annuitization rate

the percentage rate on which the issuing company bases its guaranteed payment to an annuitant.

renewal rate

the second interest crediting rate in a fixed annuity