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25 Cards in this Set
- Front
- Back
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definiton of annuity
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upside down life insurance, outliving retirements. may have beneficiaries
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superannuation
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out living the indivudals retirement benefits
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annuity tables
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reflect great lfie expectancy than life insurance tables
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accumulation (pay-in) period
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period of time from first deporit to slection fo selttlement, taxes deffered
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(pay-in) contorl of the policy
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owners rights begin at time of purchase, can change annuity date, beneficiary, settlement option
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(pay-in) premium payment options
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1. single premium
2. level premium-made regularly 3. flexible premium-as often and in whatever amount but minimum |
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(pay-in)cash value
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grows tax deferred
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(pay-in)contract surrender
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1.tax penalty of 10% if taken before 59.5. when fully surrendered charges will lessen contract payout
2. bailout provision - if i drops below the current rate by amoutn the annuity can be surrendered without charges. ONLY works with fixed annuties because they use DECLARED i rate. 3. surrender charges waived if hospitalized for extended period, nursing home, or disabled |
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(paid-out) definiton
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start at receipt of 1st periodic payment. insurer uses assumed i rate. AIR is used for any systematic annuization
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(paid-out) payment options
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1. take the money- lump sum but tax consequences
2. annuity payments- 2 FACTORS accumulation amount and age of annuitant |
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(paid-out) payment options - annuity payments (first 4)
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1. temporary annuity-benefits for speicfic period or until death of annuitant
2. life income- as long as annuiatnt lives, cease at death.(PAYS MORE) 3. life income period certain-for life or speciric period, whichever occurs LAST. if live beyond period is lasts for life 4. life income with refund- for life, upon death if havent recived equal to total payments balance goes to beneficary in lump or installments. |
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(paid-out) payment options - annuity payments (last 3)
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5. fixed amount-amount stated for as long as principal and i will pay
6. life income joint & survivor-payable to 2 or more annuitants. at 1st deatht he benefits go down to 2/3 or 1/2. joint and survior is HIGHEST for comfortable living 7. joint life-2 or more annuitants and then stop at 1st death. |
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uses of annuity(4)
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1. individuals or corp pension plans- group deffered annuity with employees get certificate
2. corp pension plans for employees with nonqualified deferred comp plans or qualified retirement plans 3. corp may NOT use to invest in profits and defer taxes for benefit of corp 4. unqualified savings or qualifed retirement. savings = unlimited contributions and retirement = limited |
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single premium IMMEDIATE annuity(SPIA)
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lump sum put into acct which can immediatley begain drawing benefits(within 1 year of issue). no accumualation period. used when person has retirment plan buy out or life insurance benefits
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single premium DEFERRED annnuity(SPDA)
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lump sum put into acct and draw benefits from in future, more than 1 year. if cancedl in early years then surrednere charges
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flexible premium DEFERRED annuity(FPDA)
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contributions as often and in whatever amount teh contract desires, is mimimum though. benefits 1 year after. deferred from taxes adn used fore reitrement. surrender if canceld in early years.
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types-fixed(4)
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1. guaranteed. benefits are level adn i is guaranteed rate.
2. minimum i in accumulation and minimum payout during annuity 3. 20 year projected cah scheudle must be shown 4. fixed amount purchasing power decreases as COL increases |
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types-equity indexed
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linked in index. safety on principal and guranteeed return (3%) adn stock martket gains.
must stay in for 5 years |
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types-market value annuity
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SPDA backed with bonds. purchases with 3-10 year pd's with longer yielding high return.
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types-variable
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payments fluctuate according to sep acct. payments in UNITS not dollars. accumulation units earned adn then converted to annuity units. unit value fluctuates
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nonforfeiture of fixed and equity-indexed annuities
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insurer absorbs 100% managment in i risk. contract owner has NO risk. insurer must pay excess interest above guranteed minimum i rate specified in contract
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securities acts1933
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all the regulations about how funds managed
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securities act 1934
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securities SALES market. agents, managers, and hoem empoloyees must take 7
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Maloney amendment of 1938
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amended 1934 and made NASD
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sec 1940
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insureres with variable, universal and vul and sets regulations
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