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fixed annuities

Glossary Terms

Comdex Rating

A ranking composite of all of the ratings that an insurance company has received from A.M. Best, Standard & Poor’s, Moody’s and Fitch. It gives the company’s standing, on a scale of 1-100, in relation to all other companies that... Read more

Installment Refund

A type of immediate annuity payout option where the insurance company guarantees that the total payout will not be less than the amount paid to purchase the annuity. If the annuitant dies before receiving payments that equal the purchase price,... Read more

Policy

The legally binding contract issued by the insurance company that defines the terms, conditions and benefits of the annuity.

Monthly Point-to-Point

An index annuity crediting method that measures the percentage change in the underlying index value each month. Usually, each monthly change is limited by a cap for positive changes, but not for negative changes. At the end of each index... Read more

Annual Point-to-Point

An index annuity crediting method that measures the percentage change in the underlying index value between two dates, the beginning and the end of the annuity contract year.

Spread or Margin

A specified percentage used in certain calculation methods with fixed indexed annuities to determine the amount of index-linked interest that is credited to the annuity. The spread or margin percentage is deducted from the total calculated change in the index... Read more

Free Look Provision

The provision in an annuity contract that allows the owner an opportunity to review the policy for a set period of time, typically 10 days or longer, after contract delivery to determine if they want to keep or return the... Read more

Annual Reset

An indexing method used with fixed indexed annuities where the index value is reset and interest earnings, if any, are credited at the end of each contract year, creating a new index value starting point for the coming year. Interest... Read more

Surrender Charge

A penalty imposed by the insurance company for terminating, or exceeding the penalty free withdrawal provisions of, an annuity contract during the surrender period.

Premium

The collective total of the initial payment, and any subsequent payments, made to purchase an annuity, excluding earned interest.