Defined terms for the annuity market and lifetime income landscape.
A guaranteed minimum withdrawal benefit is an income rider on a variable annuity or fixed indexed annuity that guarantees the right to withdraw a specified percentage of a separately-tracked benefit base each year for life, even if the underlying account value falls to zero.
An immediate annuity is any annuity contract in which income payments commence within one year of issue, with the single premium immediate annuity (SPIA) as the dominant variant in current US markets.
Income phase is the period during which a lifetime income arrangement is making scheduled payments to the contract owner, following any accumulation or deferral phase and continuing until the payments end under the terms of the arrangement.
An income rider is a category of rider attached to a deferred annuity that provides a contractually guaranteed lifetime income stream — through guaranteed annual withdrawals or guaranteed annuitization rates applied to a defined benefit base — in exchange for a separately disclosed rider charge.
An index crediting strategy is the complete specification of how an indexed annuity calculates the credit for a crediting period, including the underlying index, the calculation method, and the parameter terms that govern how index movement translates into the credit applied to the contract.
