Life Insurance

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Immediate Annuity

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Converts principle sum into income stream shortly after purchase. Funded with a single premium payment.

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Defferred Annuity

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Characterized by an accumulation phase. No current taxes due on accumulating funds. Funded with a single premium payment or multiple payments. Maturity date may or may not be annutized.

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Annuities

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Designed to protect against the risk of living too long. Earnings grow tax deferred. principle function is the liquidation of an estate.

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accumulation period

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the "putting in" time and the growth time. premiums annuitant pays into an annuity. period between the annuity purchase date and when benefits begin

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annuity period

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the "taking out" time. this is the period following the accumulation period of annuitants payments( principle and interest) during which annutity benefits are received.

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fixed annuities

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Funds invested into the insurers general account. Guaranteed minimum interest rate or current interest rate(if greater). Interest is tax deferred until withdrawn. designed to produce a fixed income stream that is guaranteed

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variable payout

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the payout can fluctuate reflecting the investment experience of the principal

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fixed payout

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payout that remains the same for the rest of the contract. equal periodic annuity payments

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variable annuities

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investment in separate account(mutual fund like). No guarantee of investment performance; owner bears risk. Gains and interest is tax deferred until withdrawn. Designed to produce an income stream that may vary based on returns.

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Equity indexed annuity investments

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a type of fixed annuity. interest crediting tied to growth of an equity index. guaranteed minimum interest rate applies for contract term. Greater of index value or guaranteed minimum equals amount credited to contract

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staight life income option

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provide for annuity payments to the annuitant for as long as he or she lives. Upon the annuitants death, no further payments are made.

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joint and survivor life income option

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provides for benefit payments for two people. if either dies payments continue to the survivor for the remainder of his or her life.

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bailout provision

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allows the annuity owner to surrender the annuity without surrender charges if interest rates drop a specific amount within a specific time period.

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annuitant

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the insured. the person on whose life the annuity contract has been issued. usually also the owner.

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in an annuity only the owner can

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change beneficiary, make withdrawlas, or surrender the annuity, pay premium, make changes to the contract during the accumulation period.

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immediate annuity

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benefit payments begin within 12 months of purchase.

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flexible premium annuity

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the purchaser has the option to vary the amount of each premium payment as long as it falls between a minimum and maximum amount. premiums made over time until annuity payments are scheduled to begin.

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level premium

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premiums paid in periodic installments over the years before the annuity income begins.

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single premium

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annuity purchased by a single lump sum payment

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premium determination factors

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annuitants age, annuitant sex, assumed interest rate, income amount and payment guarantee and loading for the companys expenses.

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fixed annuity

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a fully guaranteed contract, which is backed by funds invested in the insurers general account.

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separate acounts assets

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consist primarily of a portfolio of common stock and other equity investments.

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annuity units

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the value of these will change based on the daily performance of the separate account and so will the amount of the benefit checks

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refund life annuity

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pays the annuitant for life but if the annuitant dies too soon after the annuity period begins, there will be a refund of any undistributed principal or cost of the annuity. assures that purchase price of annuity will be paid out to someone

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life annuity certain

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an option that does not guarantee a lifetime income to the annuitant. provides for an income for a guaranteed period ( or for a fixed amount) regardless of whether the annutant is alive or not. if annuitant dies payments continue to a survivor until guarantee period ends.

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temporary annuity certain

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provides annuity payments for a specified period of time(such as 5 or 10years) or until death of the annutant- whichever occurs first.

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joint life annuity

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it covers two or more annuitants and provides monthly income only until the first annuitant dies. after first annuitants death all income benefits cease.

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joint life and survivor option

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provides benefit for the life of the annuity and the life of a survivor. a stated amount is paid to the annuitant and upon the annuitants death the same or lesser amount will be paid for the lifetime of the survivor

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tax sheltered annuities

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a pension plan for empoyees of nonprofit organization as specified by the IRS.

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retirement income annuity

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an ordinary deferred annuity but with a decreasing term life insurance rider that provides term life insurance with a face amount that decreases each year the policy is in force.when retirement age reached, say 65, decreasing term insurance death benefit expires and annuity payments begin providing retirement income.

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market value adjusted annuities

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individual deferred annuity contracts with underlying assets held in a different account.also known as modified guaranteed annuities. interest rates guaranteed for a specific period of time,.