Annuity

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • capital extraction
  • annuitize
  • receive payments
  • allowance
  • retirement account
  • subsidy

Definition of Annuity

  1. A financial agreement which arranges an agreed upon number payments over a set period of time. Commonly used for dispersing retirement income, making plans for regular payments to a savings account, or arranging periodic payments like mortgage or insurance payments.

Related Terms and Acronyms

  • Substandard Health Annuity Definition,
    • An annuity with increased income payments for people with shorter life expectancies due to medical conditions.
  • Surrender Charge Definition,
    • A charge levied when a life insurance policyholder cancels his or her policy.
  • Private Annuity Bank,
    • An arrangement where one party agrees to transfer ownership of an asset to another party (usually a beneficiary) in exchange for lifetime payments.
  • Certified Annuity Specialist (CAS) Acronym, Important,
    • A professional who is certified to provide investment advice about annuities to clients.
  • Annuity Contract Bank,
    • A contract that outlines each party's responsibilities as they relate to an annuity.
  • Joint and Survivor Annuity Definition,
    • An annuity with multiple annuitants (usually spouses) that makes payments as long as either of the annuitants are alive.
  • Indexed Annuity Definition,
    • An annuity where investment performance is pegged to a stock index.
  • Annuitization Options Bank,
    • The different income dispersal options available when annuitizing a retirement plan or annuity, such as the timeframe and list of beneficiaries.
  • Annuitant Bank,
    • An individual who owns or is the recipient of an annuity.
  • Deferred Annuity Bank,
    • An annuity that makes payments to the annuitant at some date in future instead of immediately.
  • Wraparound Annuity Bank,
    • An annuity that allows the annuitant to control how funds in the annuity are invested.
  • Revocable Beneficiary Definition,
    • A beneficiary whose benefit can be modified without his or her consent.
  • Old Age Security (OAS) Bank, Important,
    • A Canadian pension plan for eligible Canadians over the age of 65.
  • Maturity Guarantee Bank,
    • A guarantee that after a certain date a contract, such as a life insurance policy or annuity, will have a minimum dollar value.
  • Annuity in Arrears Bank,
    • When payments are made at the end of a period as opposed to the start.
  • Guarantee Period Definition,
    • A time period where income payments from an annuity are guaranteed.
  • Payout Phase Bank,
    • The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
  • Reverse Mortgage Bank, Important,
    • A loan that allows an older homeowner to convert built-up equity into cash. The loan comes due when the owner dies, sells the house or moves out.
  • Pension Bank,
    • A retirement plan where money is set aside over many years for an individual's retirement.
  • Canada Pension Plan (CPP) Acronym, Canada, Important,
    • A public pension plan administrated by the Canadian government.
  • Issue Age Definition,
    • The policyholder's age when the policy was first issued, to the nearest year.
  • Annuitization Bank,
    • The process of turning a retirement plan or annuity into income in the form of periodic payments or a single lump sum.
  • Future Value of an Annuity (FVA) Bank,
    • The value of an annuity at some future date.
  • Tax-Free Savings Account (TFSA) Bank, Canada, Important,
    • A savings account for Canadians where income earned is not taxed.
  • Inflation-Protected Annuity Definition,
    • An annuity that guarantees a return equal to or above inflation.
  • Time Deposit Bank,
    • A type of deposit account with a stated maturity at which time the account reverts to another type of account or is "rolled over" for another fixed period of time.
  • Survivorship Definition,
    • The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
  • Investment in the Contract Bank,
    • The principal that has been contributed to an annuity.
  • Annuity in Advance Bank,
    • When payments are made at the start of a period as opposed to the end.
  • Annuity Consideration Definition,
    • The payment(s) made by an individual in order to accumulate value in an annuity.
  • Superannuation Definition,
    • A retirement plan used in Australia.
  • Single Premium Deferred Annuity (SPDA) Bank,
    • A deferred annuity funded with a single payment.
  • Registered Retirement Savings Plan (RRSP) Bank, Canada, Very Important,
    • A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan.
    Tax deferred investment contribution used to reduce income tax.
  • Straight Life Annuity Definition,
    • An annuity that stops all payments upon the annuitant's death.
  • Surrender Rights Definition,
    • The contractual right for a life insurance or annuity policyholder to cancel his or her policy.
  • Split-Funded Annuity Bank,
    • Two annuities purchased together, one with a deferred payout and the other with an immediate payout.
  • Immediate Payment Annuity Bank,
    • An annuity where payments to the annuitant start immediately after the annuity has been set up.
  • Estate Planning Bank,
    • The process of determining how assets will be dispersed after an individual's death, ideally in the most tax-efficient way possible.
  • Premium Bank,
    • A payment made to an insurance company for insurance coverage.
  • Life Expectancy Method Definition,
    • A method of calculating the appropriate size of payments in an annuity's income phase by estimating the annuitant's life expectancy.
  • Tax Deferred Annuity (TDA) Bank, Important,
    • A type of annuity where taxes are deferred until the annuitant decides to withdraw money from the annuity.
    More commonly known as a Tax Sheltered Annuity (TSA).
  • Annuity Table Bank,
    • A table that can be used to find the future value of an annuity.
  • Second-To-Die Insurance Definition,
    • Life insurance that only pays a death benefit when both spouses have died, commonly used in estate planning.
  • Annuity Certain Bank,
    • A type of annuity that makes payments to the annuitant for a set term; payments stop when the agreed upon term ends, even if the annuitant is still alive after the term ends.
  • Investment Income Bank,
    • Income that is earned from investments such as interest, dividends, and capital gains.
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