Common Annuity Language
|
| Accumulation period -- The time during which you pay
money into an annuity contract and build up a fund to provide a deferred
annuity. |
| Annuitant -- The person entitled to receive annuity
payments or who now receives them. |
| Annuity -- A contract that provides for a series of
payments, usually at regular intervals, for the duration of life. |
| Deferred annuity -- Annuity payments that will begin
at some future date. |
| Flexible premium deferred annuity -- An annuity
contract that permits varying premium payments from year to year, and which is
often used for IRAs. |
| Immediate annuity -- Annuity payments that begin
immediately or within about a year. |
| Individual Retirement Account (IRA) -- An account set
up by an individual that in some cases allows contributions to be deducted from
income and permits earnings on contributions to accumulate tax-deferred until
retirement, regardless of whether the contributions are deductible. Under the
1986 tax law, only those who do not participate in a pension plan at work or
who do participate and meet certain income guidelines can make tax-deductible
contributions to an IRA. All others can make contributions to an IRA on a
non-deductible basis. |
| Keogh plan -- A type of tax-favored retirement plan
for self-employed persons. |
| Load -- Any sales fees or charges you pay in
purchasing an annuity contract. |
| Payout Period -- The period during which you receive
the income from your annuity contract. |
| Principal -- The amount you pay into your annuity
contract as distinguished from the interest that is credited to it. |
| Qualified annuity -- An annuity that is sold as part
of a tax-qualified Keogh plan or company pension plan. |
| Straight life annuity -- An annuity whose periodic
payments stop when the annuitant dies. |
| Variable annuity -- An annuity contract under which
the monthly payments will vary because they are linked to the values of
investments such as common stocks. This contrasts with the fixed dollar
annuity, which guarantees a fixed amount monthly. |
