Annuities: Types and Features
Equity indexed annuities
Annuities where the equity is tied to an index such as the S&P 500
Life annuity
Annuity settlement that stops when the annuitant dies
Flexible Premium annuity
Annuity that allows for flexible payments
Immediate annuity
Annuity that begins paying one month after it is purchased
Single premium immediate annuity
Annuity that begins paying one month after it is purchased with a single premium
Fixed annuity
Annuity that guarantees a minimum rate of return
Joint and Survivor Annuity
Annuity that is best suited for a retired couple seeking income for as long as either lives
Deferred annuity
Annuity that is purchased to provide guaranteed income after retirement
Variable annuity
Annuity that is purchased with an inherited large amount of money
Level premium deferred annuity
Annuity that is purchased with level premium payments and begins paying after a certain period
Refund annuity
Annuity that pays a lump sum payment to the beneficiary if the annuitant dies after the annuity income begins
Life Annuity with Period Certain
Annuity that pays a specified number of years whether the annuitant is alive or dead
Life income annuity
Annuity where the benefit payment amount is influenced by various factors
Tax consequences
Consequences of surrendering a nonqualified individual fixed annuity prior to age 59 1/2
Immediate annuity contract
Contract that systematically liquidates both principal and interest
Deferred annuity contract
Contract where annuity payments are based on the annuitant's life expectancy
Surrender charges
Included in an annuity contract to discourage early termination
Flexible payments
Payment method that can be used to purchase annuities
Level payments
Payment method that can be used to purchase annuities
Single lump-sum payment
Payment method that cannot be used to purchase annuities
Straight life payout option
Payout option that provides the largest monthly check in a single premium, immediate annuity
Annuitant
Person whose life the annuity income amount is based on in an immediate annuity
Fixed Period
Settlement option that pays a specific amount to the annuitant with no residual value payable to a beneficiary
Minimum Interest Rate
The minimum rate of return a fixed annuity earns
Annuity period
Time when a policyowner contributes to an annuity
