Learning Center

Glossary Terms (P1)

The gross value of an annuity, prior to adjustments from any applicable loans, Market Value Adjustments, premium taxes, or Surrender Charges.

The time period beginning when the Deferred Annuity is opened and ending when the Payout Phase begins. During this period, interest accumulates free of any current income taxes.

A common feature on optional Guaranteed Lifetime Withdrawal Benefit riders, which raises the Benefit Base to the greater of the Benefit Base or the Account Value each year.

The individual upon whose life the Deferred Annuity is based, and the individual that will receive the Annuity Payments when the Payout Phase begins. Generally the Annuitant and Annuity Owner are the same individual. Joint Annuitants are allowed for Annuity Payments after the Payout Phase begins. Only at the death of the Annuitant is the Death Benefit paid to the Beneficiary.

A feature offered on some Fixed and, Indexed, and Variable Annuities where the insurance company issuing the annuity credits the Account Value of the contract with a stated percentage of additional money, in the event that the contract is annuitized.

To change all or a portion of the annuity contract from a cash accumulation period to the periodic distribution of funds.

The person who purchases the Annuity. The Owner may be more than one individual, or a trust (special rules apply for “nonnatural” Owners). The Owner may also be the Annuitant or the Beneficiary. There is no limit to the number of Owners on any one contract.
The Owner has the following rights during the lifetime of the Annuitant: The right to designate the Annuitant.
The right to designate the Beneficiary.
The right to designate the Annuity Payout Starting Date.
The right to designate the Settlement Option.
The right to make early withdrawals or surrender the Annuity.
The right to make an assignment or name another Owner.
For IRA, Keogh and teacher salary reduction plans the Owner and Annuitant have to be the same individual.

Continued ->>   (page 1 of 12)