Defined terms for the annuity market and lifetime income landscape.
Illustration regulation is the set of rules governing how projected future values of an annuity contract may be presented to an individual in connection with the sale of the contract, including requirements for showing multiple scenarios, and prohibitions on misleading presentations.
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.
In-force illustration is a post-issue presentation of a specific annuity contract's projected future values based on current contract conditions and stated assumptions, typically produced periodically or upon request to show how the contract is performing and expected to perform going forward.
Income floor is the level of guaranteed lifetime income an individual establishes to cover essential expenses, typically funded through Social Security, pensions, and lifetime income products, with additional retirement resources providing discretionary or upside income above the floor.
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.
