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Glossary
A-D
accumulation unit
A unit used to measure the value of the separate account of an annuity during the accumulation phase.
accumulation unit value
The value of each accumulation unit at the end of each valuation period for a variable annuity.
annuitant
A person whose life determines the income benefits from an annuity, either for life or for a specified period of time. There may be one or two annuitants; one is the primary annuitant and the other is the joint annuitant.
annuitization
The payout period on an annuity.
annuity
A tax-deferred investment sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement.
annuity date
The date annuitization must commence.
annuity payment option
A specification under which a series of annuity payments are made to the annuitant or other payee.
annuity unit
A share of a variable annuity paid to an annuitant in the form of an income payment.
asset allocation
The spreading of investments across a variety of assets, typically stocks, bonds, real estate and cash.
asset class
A specific type of investment, such as growth stocks or high-yield bonds.
asset rebalancing
Over time, certain sub-accounts will perform better than others, causing a shift in allocation percentages. Asset rebalancing periodically returns the contract to its original allocation percentages.
beneficiary
An individual, institution, trustee or estate that receives funds, property, or other benefits from a contract such as an insurance policy, a will, a retirement plan or an annuity.
cash value
The amount available in cash upon cancellation of an insurance policy -- usually a permanent life policy -- before it becomes payable upon death. Also known as "cash surrender value" or "surrender value."
death benefit
A payment made to a beneficiary from an annuity or policy following the death of the policyholder. Also known as "survivor benefit."
deferred annuity
An annuity in which the annuitant delays income payments until some point in the future.
dividend
Distributions to policyholders of participating policies as declared by the board of directors.
dollar cost averaging
A practice of investing equal amounts of money on a regular basis, regardless of market performance. The objective of dollar cost averaging is to purchase more shares when prices are low, fewer when prices are high, with the net effect of reducing the average cost per share.
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