Annuities

Equity-indexed annuity

A fixed annuity that credits interest based on the current interest rate and has a guaranteed minimum interest rate Has a cap on the interest rate

Cash-or-installment refund annuity

AKA refund life annuity

Term-certain rider

After the contract has been annuitized, a _____ rider may be used to pay a death benefit for a set period

Life annuity with installments certain

Also known as Life annuity with period certain

Straight life

Also known as a life annuity or pure life annuity

IRA, Educational purposes, first time home buying

An annuity may be used to fund a _______ and defer taxes on contributions until retirement, on a limited basis for ______ and _______

Variable annuity

Annuitant bears the risk

Variable annuity

Doesn't guarantee the amount of period annuity payments and has no guaranteed interest yield; Yield on its cash value and the annuity payments will vary based on the insurer's investments in securities

fixed annuity

Earn interest

Fixed annuity

General account

Life annuity with period certain

Has features of both the life annuity and annuity certain Provides annuity payments for the longer of the specified period or the annuitant's lifetime If the annuitant dies before the end of the period, the beneficiary will receive payments, if he outlives the period, he will continue to receive payment until his death with nothing paid to the benficiary

Surrender charges

If funds are withdrawn before annuity payments begin, the amount of these charges reduce over time

Fixed annuity

In addition to the expense and mortality guarantee, it also has an additional guarantee. It guarantees a minimum interest yield, however the rate applied may be higher

Fixed-installment annuity

Involves a level periodic premium payment, these payments are made in equal amounts at specified times until the annuity payments begin

Flexible-premium annuity

Involves funding by periodic premium payments, but these payments may be paid at varying times and in varying amounts between a set minimum and maximum

Nonforfeiture

Law that applies to most individual deferred annuities

Annuity

Liquidation of estate through a series of regular installments paid to an annuitant

Immediate annuity

May only be funded with a single premium

Deferred annuity

May only be paid with a fixed-installment annuity

Immediate annuity

May only be paid with a single-premium annuity

Annuity

No insurance coverage

Death benefit

Only paid if the annuitant dies during the accumulation period and before any income benefits are received

Single-premium annuity

Paid for in a lump sum

Refund life annuity

Pays until the annuitant dies or the total amount of premiums paid is refunded. Cash-refund annuity is paid in a lump sum Installment-refund annuity is paid in continued annuity payments

Variable annuity

Separate account

Nonforfeiture

Take the cash value as a surrender benefit, in which case taxes and potential federal penalties may apply

Annuitization period

The period during which annuity payments are paid to the annuitant

Accumulation period

The period of time in which premiums are being paid to fund an annuity

Fixed annuity

The periodic annuity payment is level and guaranteed; the insurer bears the risk associated with mortality, expense and interest rate

Immediate annuity

Will begin paying income to the annuitant immediately

Market value adjusted annuity

Will commit to pay for the annuity for a certain period of time, the longer the period, the higher the interest rate that will be applied to the annuity

Deferred annuity

Will put off annuity payments until some time later than a one-payment interval from the date of purchase

Annuity certain

also known as a period certain annuity

Variable annuity

are invested and earn a return of investment

Period certain annuity

provides annuity payments for a certain specified period of time. Amount of each payment is based on the period selected

Straight life

provides payments for the life of the annuitant, the amount is based on the annuitant's life expectancy, premiums paid and the amount of interest earned on the funds held by the insurer

Nonforfeiture

provides that if the contract lapses, the annuitant may use the cash value as premium for a paid-up annuity as set forth in the contract