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Glossary Terms

Term Current Annual Yield

The annual yield, including bonuses if applicable, up to the first penalty free full withdrawal window, assuming the current base interest rate remains unchanged for the duration of the term.

Term Guaranteed Annual Yield

The annual yield, including bonuses if applicable, up to the first penalty free full withdrawal window, assuming the interest rate is reduced to the contractually guaranteed minimum at the first available opportunity, for the duration of the term.

Basis Point

A unit of measure for interest rates where one basis point is equal to 1/100th of 1%, or 0.01%.

Withdrawal Charge

A penalty imposed by the insurance company to withdrawals made in excess of specified penalty free amounts, or full contract surrenders, during the time in which the annuity is still subject to the surrender period.

Guarantee Period

The period of time for which the declared interest rate is guaranteed.

Single Life Annuity

An annuity payment option that provides guaranteed income payments for as long as the sole named annuitant is living.

Renewal Rate

The interest rate offered by an insurance company on an inforce fixed annuity after the initial guarantee period is over.

Accumulated Interest

Interest earnings that have accumulated inside an annuity contract and have not yet been withdrawn.

FDIC

The Federal Deposit Insurance Corporation (FDIC) is a federal government corporation that provides deposit insurance guaranteeing the safety of a depositor’s accounts in member banks up to certain dollar limits.

Daily Averaging

An index annuity interest crediting method that is calculated by comparing the underlying index value on the first day of the contract year to the daily average (usually 252 trading days) of that same index at the end of the… Read more