The participation rate determines what percentage of the increase in an index will be used to calculate index-linked interest credits to a fixed indexed annuity.
Penalty Free Withdrawals
The amounts specified in an annuity contract that can be withdrawn on a penalty free basis, even during the time in which the annuity is subject to early surrender charges.
An immediate annuity payment term where income payments are made by the insurance company for a predetermined set period of time only.
An index annuity crediting method that measures the percentage change in the underlying index value between two dates to determine the amount of interest credit applied to the contract.
The legally binding contract issued by the insurance company that defines the terms, conditions and benefits of the annuity.
The collective total of the initial payment, and any subsequent payments, made to purchase an annuity, excluding earned interest.
The percentage added by the insurance company to premium payments made by the annuity owner. Bonuses are frequently subject to a vesting schedule.
A tax imposed by some states on certain annuity products. The amount of tax can vary depending on the type of funds (qualified or non-qualified) used to purchase the annuity. Most insurance companies factor the tax, if any, into the pricing of their products, so the annuity purchaser is rarely even aware of its existence.
The collective total of the initial premium deposit, and any subsequent premium deposits, paid to purchase an annuity, excluding earned interest.
A legal document that must be delivered, under Securities and Exchange Commission (SEC) regulations, to the prospective buyer of a variable annuity before the actual sale, providing details about the variable annuity offering.