Annuities

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What is the purpose of an Annuity?
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Terms in this set (17)
What is the purpose of an Annuity?
To liquidate a sum of money.

[k, (11.1) p. 204] #TheInsuranceSchool
COMPARE: Annuities (VS) Life Insurance

Annuities are focused on how long the annuity-owner will LIVE.
COMPARE: Annuities (VS) Life Insurance

Life insurance focuses on how soon the policy-owner will DIE.

[k, (11.1.1) p. 205] #iFlash4u
COMPARE: Annuities (VS) Life Insurance

Annuities are primarily investment products. They are NOT subject to Mortality Risk.
COMPARE: Annuities (VS) Life Insurance

Life insurance pricing is primarily based on Mortality Risk.

[k, (11.2) p. 205]
[Define] Accumulation
The gradual gathering of something.
Annuity Accumulation Period
The period where funds are being paid into the annuity.

[k (11.2) p. 205]
#LifeInsuranceWTF
[Define] Annuity Period
When the annuity begins paying an income.

[k (11.2) p. 205]
[Define] Principal
A sum of money.

[k, (11.1) p. 204]
Accumulation Period:
Single Premium...
One single lump-sum premium completely funds the Annuity.

[k, (11.3.1.1) p. 207]
Accumulation Period:
Flexible Annuity Funding...
Flexible Premium annuity funding allows the owner to decide when contributions are made.

*NO MINIMUM Funding requirements

[k, (11.3.1.2) p. 207]
[Define] Immediate
No delays - NOW - ASAP!
#iFlash4u Immediate Annuities...Immediate Annuities begin making income payments ONE-MONTH after the date of purchase. [k, (11.3.2.1) p. 207] #LifeInsuranceWTFWhen does an Immediate Annuity begin making payments to the owner?Immediate Annuities begin making income payments ONE-MONTH after the date of purchase. [k, (11.3.2.1) p. 207] #TheInsuranceSchool#iFlash4u ONLY a Single Premium Annuity can be structured as an Immediate Annuity.Single Premium Immediate Annuity begins making income payments ONE-MONTH after the date of purchase. [k, (11.3.2.1) p. 207[Define] DeferTo delay, put-off or postpone until a later time.Single Premium - Deferred Annuities can be structured to postpone income payments until a specified later date.Deferred AnnuityProvides income payments at a specified future date. [k, (11.3.2.2) p. 208]#iFlash4u Deferred Annuities can be funded with Flexible Premiums.Deferred Annuities can be funded with a Single Premium.