Defined terms for the annuity market and lifetime income landscape.
An installment refund annuity is a payout structure in which the insurer makes scheduled income payments for the contract owner's lifetime and, at the annuitant's death, continues the same scheduled payments to a designated beneficiary until the cumulative total paid equals the original premium.
An installment refund option is a payment structure that pays income for the contract owner's lifetime with a guarantee that, if payments received before death fall short of the premium, the balance is paid to a beneficiary as continuing installments until the premium is recovered.
An insurance agent is a state-licensed individual or entity authorized to solicit, negotiate, and place insurance contracts — including annuity contracts — on behalf of one or more insurance carriers, and to receive commission compensation from the carrier on placed business.
An insurance company is a state-chartered corporation licensed to underwrite insurance contracts — including annuities — that collects premiums, holds capital and reserves against the promises it makes, and is regulated by the insurance department of each state in which it operates.
A financial strength rating is an opinion issued by a specialized rating agency about an insurance company's ability to meet its ongoing insurance policy and contract obligations, expressed on a letter-grade scale that ranks insurers from strongest to weakest on a forward-looking assessment.
