13. Vocabulary - Annuities Aa Aa E What Are Annuities? An annuity is just the opposite of life insurance. Life insurance is the systematic accumulation of an estate that is used for protection against financial loss resulting from premature death. In contrast, annuities are a means of securing a steady cash flow during retirement. The period in which the premiums are paid toward the purchase of an annuity is called the period. The period when the annuity payments are made is called the period. Thaccumulation premium paid by the individual buying the annuity (called the ). Interest is earned b payment Innuities are , accruing tax free but paid for with after-taxo distribution ition of the principal and interest has not been returned, it is referred to as the benefit. Pol LIONTOL Terminology: Annuities Match the terms relating to the basic terminology and concepts associated with annuities on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description D A. Single premium annuity contract Immediate annuity B. The insurance company safeguards the principal and agrees to a minimum interest rate over the life of the contract. Often purchased by individuals, this annuity allows periodic payments made over time. This type of contract allows cash benefits to be stretched for several years. Installment premium annuity contract Survivorship benefit D. This annuity usually requires a minimum investment ($2,500 to $10,000) and is often purchased just before retirement as a way of creating a future stream of income. Deferred annuity E. Without regard for life contingency, this annuity specifies monthly income for a stated number of years. Pure life F. The amount that is ultimately paid out to the insured varies with the investment results obtained by the insurance company. Life annuity, period certain This annuity allows the purchaser to receive monthly benefits immediately. Annuity certain When the purchaser dies, the contract terminates and the estate or beneficiaries do not receive a refund. Fixed-rate annuity In this type of contract, the benefits aren't limited to the purchaser only but may extend to named beneficiaries. Variable annuity This is the portion of principal and interest not returned before the purchaser dies. 13. Vocabulary - Annuities Aa Aa E What Are Annuities? An annuity is just the opposite of life insurance. Life insurance is the systematic accumulation of an estate that is used for protection against financial loss resulting from premature death. In contrast, annuities are a means of securing a steady cash flow during retirement. The period in which the premiums are paid toward the purchase of an annuity is called the period. The period when the annuity payments are made is called the period. Thaccumulation premium paid by the individual buying the annuity (called the ). Interest is earned b payment Innuities are , accruing tax free but paid for with after-taxo distribution ition of the principal and interest has not been returned, it is referred to as the benefit. Pol LIONTOL Terminology: Annuities Match the terms relating to the basic terminology and concepts associated with annuities on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description D A. Single premium annuity contract Immediate annuity B. The insurance company safeguards the principal and agrees to a minimum interest rate over the life of the contract. Often purchased by individuals, this annuity allows periodic payments made over time. This type of contract allows cash benefits to be stretched for several years. Installment premium annuity contract Survivorship benefit D. This annuity usually requires a minimum investment ($2,500 to $10,000) and is often purchased just before retirement as a way of creating a future stream of income. Deferred annuity E. Without regard for life contingency, this annuity specifies monthly income for a stated number of years. Pure life F. The amount that is ultimately paid out to the insured varies with the investment results obtained by the insurance company. Life annuity, period certain This annuity allows the purchaser to receive monthly benefits immediately. Annuity certain When the purchaser dies, the contract terminates and the estate or beneficiaries do not receive a refund. Fixed-rate annuity In this type of contract, the benefits aren't limited to the purchaser only but may extend to named beneficiaries. Variable annuity This is the portion of principal and interest not returned before the purchaser dies