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6 Cards in this Set
- Front
- Back
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Annuity
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contract between the annuity owner and an insurance company in which the ER promises to make periodic payments to the policyowner immediately or sometime in the future.
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1. Accumulation Period - time during which the contract earns interest and builds a cash value
2. Payout Period: when the funds are distributed |
TWO stages in an annuity:
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1. Single Premium Annuity
2. Periodic Premium Annuities |
2 major funding categories for annuities:
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Two Tiered Annuities
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an annuity can be taken as a lump sum or as a stream of periodic income payments
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Fixed Annuites
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provide a guaranteed rate of return
**credited with 2 interest rates: 1. min guaranteed interest rate 2. current annual interest rate |
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Equity Indexed Annuities
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simialr to a fixed annuity with the exception that the interest credited to the annuity is linked to a stock market index
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