A Guaranteed Minimum Accumulation Benefit (GMAB) is an annuity rider that guarantees a minimum level of interest will be credited to the account, even if market conditions are unfavorable. This rider is often used to provide a floor for an account that is invested in a variable annuity. The GMAB rider typically has a term … Read more
A joint and survivor annuity is an annuity contract in which payments are made to two people, typically a married couple, during their lifetimes. After the first person dies, the payments continue to be made to the surviving spouse. There are two types of joint and survivor annuities: 1. Level-pay: This type of annuity pays … Read more
. What is perpetuity? Perpetuity is an annuity that pays out indefinitely. The payments do not have a fixed end date, and they continue as long as the recipient is alive. What are the 3 types of annuities? There are three primary types of annuities: immediate, deferred, and indexed. Immediate annuities begin making payments to … Read more
An “interest-crediting method” is the way in which interest is credited to an annuity. There are three main types of interest-crediting methods: 1. Fixed interest rate: With this method, the interest rate is fixed for the life of the annuity. This means that the interest credited will never change, regardless of what happens to interest … Read more
A split-funded annuity is an annuity that is funded by both the annuitant and the annuity issuer. The annuitant’s portion of the annuity is typically invested in a fixed account, while the issuer’s portion is invested in a variable account. The annuitant is then able to receive a guaranteed income for life, regardless of how … Read more
A guaranteed investment contract, or GIC, is a type of investment that offers a guaranteed rate of return over a fixed period of time. GICs are typically issued by banks, credit unions, and insurance companies. GICs are a popular choice for investors who are looking for a safe and secure way to invest their money. … Read more
A systematic withdrawal schedule is a schedule of periodic payments from an annuity, typically used to provide income during retirement. The payments are made at regular intervals, such as monthly or quarterly, and can continue for a specified period of time, such as 10 years, or for the lifetime of the annuity holder. At what … Read more
A cash refund annuity is an annuity that pays out a lump sum of cash to the annuitant upon the annuity’s maturity. The cash refund annuity is one type of annuity that is available to investors. How long is an annuity term? An annuity term is the length of time during which annuity payments are … Read more
The equivalent annual annuity approach is a financial analysis technique that is used to compare different investment opportunities. The technique converts all of the cash flows from an investment into an equivalent annual annuity, which makes it easier to compare investments that have different durations and/or different cash flow patterns. The EAA approach is based … Read more
An annuity unit is a measure of an annuity’s value. One annuity unit is usually worth $1,000, but this can vary depending on the annuity and the insurer. The number of annuity units an annuity has dictates the annuity’s value. What is the best type of annuity? There are many types of annuities, and each … Read more
