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fixed annuities

Glossary Terms

First Year Yield

The guaranteed first year yield, including bonuses if applicable.

Fixed Account First Year Yield

Fixed Account First Year Yield is the guaranteed first year yield, including bonuses if applicable, assuming 100% of the premium deposit is allocated to the Fixed Account.

Fixed Account Rate

The current interest rate applied to premium that is allocated to the fixed account. Typically this interest rate is adjusted annually by the insurance company after contract issue.

Fixed Annuity

A type of annuity where your money earns interest at rates set by the insurance company or as spelled out in the annuity contract. The insurance company guarantees both interest earnings and principal.

Required Minimum Distribution (RMD)

The amount that IRA owners and qualified plan participants must begin withdrawing from their retirement accounts by April 1 following the year in which they reach age 72. RMD withdrawals must then be taken each subsequent year.

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The amounts specified in an annuity contract that can be withdrawn on a penalty free basis, even during the time in which the annuity is subject to early surrender charges.

Market Value Adjustment (MVA)

An adjustment formula applied to withdrawals made in excess of penalty free amounts, or full contract surrenders, during the time in which the annuity is still subject to the surrender period. The adjustment may decrease or increase the amount of... Read more

Accumulation Value

The total current value of a fixed annuity which includes all of the premium payments made plus accumulated interest earnings to date, less any fees or previous withdrawals, but before the application of any surrender charges.

Income Account Value

The value used to determine the amount of guaranteed lifetime income that you will receive once activating that feature on an annuity with an attached income rider.

Guaranteed Minimum Surrender Value

The minimum amount defined in the policy that the contract owner is guaranteed to receive upon surrender of the annuity after the application of surrender charges and market value adjustments (MVA), if any.