Annuity Definitions
Annuity:
An Annuity can be defined as a contract which provides an income stream in return for an initial payment.
Immediate Annuity:
An instrument that allows a person to convert a sum of money into a guaranteed series of payments for a period equal to the greater of the person's life or a certain number of years.
Deferred Annuity:
A Deferred Annuity contract allows you to accumulate tax-deferred earnings during the term of the contract, and sometimes add assets to your contract over time. Your Deferred Annuity earnings may be either Fixed or Variable, depending on the way your money is invested.
Fixed Annuity:
A type of Annuity that provides payment of a specific sum of money at a fixed rate of return for a fixed period of time. In addition to guaranteeing your principal, a Fixed-Rate Annuity earns a guaranteed rate of interest for a specified period of time.
Fixed-Index or Equity-Index Annuity:
A type of Annuity that provides payment of a specific sum of money at a fixed rate of return for a fixed period of time. In addition to guaranteeing your principal, a Fixed-Rate Annuity earns a guaranteed rate of interest for a specified period of time.
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