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20 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Accumulation Period |
-paying in money -Interest grows (not taxable) -Annuity value belongs to owner |
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Annuitization period |
-pay out period -no withdrawals -Owner can't change the contract |
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Annuity Parties |
Contract owner -names the annuitant and beneficiary -can withdraw money and end the contract Annuitant -receives the income (can be multiple people) Beneficiary -receives the accumulated value if owner dies - may receive income payments Insurer (rep) |
-Contract owner -annuitant (insured) -beneficiary -insurer |
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Annuities vs. Life insurance |
Life insurance -Premium buys a death benefit Annuities -Premium used to accumulate money or provide income while living |
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Immediate Annuity |
-single premium -none or short accumulation period |
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Deferred Annuity |
-flexible premiums (can be single, annually, monthly...) -has an accumulation period -Owner decides annuitization at a later time |
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Surrender or Withdrawal |
-10%tax if withdrawn before 59.5 -surrender period (waiting period) -surrender fee for early withdrawal |
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Death benefit |
Accumulated value paid if owner dies |
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Life annuity |
-best monthly check that pays until death occurs |
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Life annuity with refund |
-Income for life -if annuitant dies early its paid to the beneficiary |
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Life annuity period certain |
-Income for life -if annuity dies before the period then the rest is paid to beneficiary |
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Joint life & Survivor annuity |
Payments made until second person dies (may be reduced payments) |
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Joint life annuity |
Survivor is screwed if one person dies... |
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Factors in determining a life annuity payment amount |
-Age -Gender -Length of payment -Interest rate |
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Fixed Annuities |
-General account -long term low risk investments -fixed income payments for annutization -money guaranteed by company |
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Variable Annuities |
-Seperate account assets -Accumulation units (like shares) -Annuity units (converted from above and can go up or down depending on Seperate account performance) -must be licensed |
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Equity indexed Annuities |
-Fixed annuities -value guaranteed -Interest earned is tied to stock market |
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Market Value Adjusted Annuities |
-interest rate for a fixed number of years -flexible and guaranteed rates if it reaches maturity |
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Uses of Annuities |
-Life income -tax favored savings -funding IRAs -education funds |
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Group Annuities |
Determined and owned by employer |
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