Annuitization Definition.

An annuity is an insurance product that provides guaranteed income for a specific period of time, or for life. An annuitization is the process of converting an annuity contract into a stream of payments. What are the three basic phases in the life of an annuity? There are three basic phases in the life of … Read more

Advance Funding.

An advance funding annuity is an annuity that is funded in advance of the start date. This means that the annuity is funded with a lump sum payment that is made before the annuity payments begin. The lump sum payment is typically made by the annuity holder, but it can also be made by a … Read more

Inflation-Protected Annuity (IPA).

An Inflation-Protected Annuity (IPA) is an annuity that provides protection against inflation. The payments made by the annuity are adjusted periodically to keep pace with the cost of living, as measured by the Consumer Price Index (CPI). This type of annuity is often used by retirees to help ensure that their income keeps pace with … Read more

Understanding the Assumed Interest Rate (AIR).

Annuities are insurance products that can provide guaranteed income for life. One key feature of an annuity is that it has an assumed interest rate (AIR). The AIR is the rate of return that the annuity is assumed to earn. This rate is used to calculate the annuity’s payouts. The AIR is important because it … Read more

What Is a Mortality and Expense Risk Charge?

A mortality and expense risk charge is a charge assessed by insurance companies on annuities and other insurance products to cover the costs of mortality and expenses. This charge is generally assessed as a percentage of the premiums paid by policyholders, and it is used to cover the costs of insurance company operations, including claims … Read more

Life Annuity.

A life annuity is an insurance product that pays out an income stream for as long as the annuitant is alive. It is a type of annuity that is purchased with a lump sum payment and pays out periodic payments, typically monthly, until the annuitant’s death. What is a 5 year certain and life annuity? … Read more

Straight Life Annuity.

A straight life annuity is a type of annuity that provides regular payments to the annuitant for their lifetime. This type of annuity is often used as a retirement income stream, as it can provide a predictable and steady source of income throughout retirement. When the annuitant dies, the annuity payments stop and the annuity … Read more

What Is an Annuity Certain?

An annuity is a financial product that pays out a fixed income stream over a period of time. The income stream can be for a specific number of years, or for the lifetime of the annuitant. The payments from an annuity are guaranteed, which means that the annuity will pay out even if the markets … Read more

What Is a Contingent Annuitant?

A contingent annuitant is an individual who is entitled to receive payments from an annuity upon the death of the primary annuitant. The primary annuitant is the individual who originally purchased the annuity. Can a Contingent annuitant be changed? Yes, a contingent annuitant can be changed. However, the process and rules for doing so may … Read more

Single-Premium Deferred Annuity (SPDA).

A Single-Premium Deferred Annuity (SPDA) is an annuity contract in which the policyholder pays a single premium, and the insurer agrees to make periodic payments to the policyholder at a future date. The payments may be made either in a lump sum or in installments, and the policyholder may elect to receive them either for … Read more