Annuities Glossary

The period which begins at issue and ends when the withdrawal phase begins. In this phase, the basis for the future guaranteed payouts under a GLWB rider is built up.

The process of converting your annuity value into a stream of regular income payments.

A contract with an insurance company that provides tax-deferred growth and can offer a guaranteed income for life and/or a specified period of time.

The person who receives the remaining annuity value or death benefit if the annuitant passes away.

Maximum interest rate that is credited to the portion of the Policy Accumulation Value allocated to a specific Index Option on the Index (Sweep) Date.

Method that is used to determine interest that is credited to the Policy Accumulation Value.

An annuity where income payments begin at a future date, allowing time for the investment to grow.

Offers a guaranteed interest rate and predictable income payments.

Consists of premiums allocated to the fixed account plus transfers into the fixed account interest credited thereon, less any rider charges and partial withdrawals apportioned to the fixed account and transfers from the fixed account.

Allows you to withdraw a certain percentage of your annuity value each year without penalty.

The rider option associated with the person or persons upon whom the Lifetime Withdrawal Benefit Amount is based. Options are single life and joint spousal.

A rider that guarantees a lifetime income, even if the annuity value drops to zero.

Under a GLWB rider, begins when the policy’s accumulation value has been reduced to zero during the Withdrawal Phase. LWBA payments continue during the Guaranteed Phase.

Also called index participation account value. Consists of premiums allocated to the index options plus transfers into the index options and index credits paid thereon, less any rider charges and partial withdrawals apportioned to the index options and transfers from the index options.

In an Indexed Annuity, the interest credited to the Index Account Value.

Market indices which are tracked to determine interest credited at the end of the Index Period.

Period of time between two index or sweep dates over which Index Credits are determined according to the change in a market index.

Date on which an index period ends and the Index Credit is credited to the Policy Accumulation Value.

A type of annuity where interest credited is linked to a market index such as the S&P 500; they are non-registered products, offering growth potential with downside protection (interest is typically floored at zero percent or higher).

Under a GLWB rider, the maximum annual amount that can be withdrawn in the withdrawal and guaranteed phases without reducing future GLWB benefits.

A benchmark, such as the S&P 500, used to determine interest credited to an indexed annuity.

During the surrender charge period, partial withdrawal or full surrender amounts that are subject to a surrender charge may also be subject to a Market Value Adjustment. This amount may be a positive or a negative amount in addition to the surrender charge and reflects changes in investment market conditions.

The greater of the Policy Surrender Value or the non-forfeiture value as defined by the standard non-forfeiture law.

Premiums are accepted throughout the first policy year only.

The percentage of the change in the value of an index that is credited to the portion of the Policy Accumulation Value that is allocated to an Index Option.

Index Account Value plus the Fixed Account Value + any vested premium bonus account value if any, less partial withdrawals and rider charges.

Date from which policy months and anniversaries are measured.

The Policy Accumulation Value less any surrender charge +/- any Market Value Adjustment.

The money you pay into an annuity, either as a lump sum or through periodic payments.

A feature of some annuities that ensures you won’t lose your original investment due to market downturns.

An annuity purchased with pre-tax dollars, often through a retirement plan like an IRA or 401(k).

An optional feature added to an annuity contract for additional benefits, such as enhanced income, surrender benefits or death benefits.

A fee charged for withdrawing more than the allowed amount from your annuity during the surrender charge period.

The time during which withdrawals from the annuity may incur surrender charges.

Earnings on your annuity grow without being taxed until you withdraw them.

An annuity where returns are based on the performance of selected investment options, with potential for higher gains and risk.

The period that begins when the policy owner elects to start the lifetime withdrawals under a GLWB rider.