CPCU 556: Chapter 3: Annuities

A type of life insurance policy or contract that makes periodic payment to the recipient for a fixed period or for life in exchange for a specified premium.

A legally enforceable agreement between two or more parties in which each party makes some promise to the other.

The person insured under the annuity

An annuity contract bought with a single payment and with a specified payout plan that starts right away.

An annuity with an accumulation period that usually lasts a number of years.

The date in a deferred annuiy contract when periodic payments, based on the anuitiy's cash value are scheduled to begin.

The period of time, sometimes referred to as the distribution period, during which a deferred annuity's cash value is systematically liquidated through periodic payments.

The period during which a deferred annuity's cash value is accumulated for eventual liquidation in period payments during the annuitization period.

An annuity that is purchased over time, usually with fixed equal premiums paid in monthly or annual installments.

An annuity with no predetermined premium amount or required premium frequency.

An annuity contract under which the issuing insurer guarantees interest at a rate no less than that specified in the contract and guarantees the cash value of the contract under loss.

The interest rate, excess of any guaranteed interest rate, at which an insurer credits interest under its interest-bearing insurance products.

An annuity contract whose value fluctuates with that of an underlying securities portfolio or another index of performance.

An annuity that is used as a funding vehicle in a qualified plan, such as an individual retirement account, a tax-sheltered annuity, or a 401(k) plan.

An annuity payment sponsored by life insurance companies in which the payoff is linked to the assets in which policy premium is invested.