Defined terms for the annuity market and lifetime income landscape.
A single premium immediate annuity (SPIA) is a lifetime income arrangement in which the contract owner pays a one-time premium to an insurer in exchange for periodic income payments that begin within one year of purchase and continue for the contract owner's lifetime or another specified structure.
A split annuity is an arrangement in which an individual allocates capital across two annuities at the same time — typically an immediate annuity paying current income and a deferred annuity accumulating for future use — to produce defined income now while preserving growth for later.
A step-up provision is a rider mechanic that periodically resets the benefit base — or another rider-defined value such as a guaranteed minimum death benefit — to a high-water mark of the contract's account value at specified contract anniversaries, locking in past investment performance.
A structured annuity is a deferred annuity that credits returns according to a defined payoff structure linked to a specified index or reference asset, incorporating designed downside protection features and typically registered as a security.
A subaccount is an investment option within a variable annuity contract, structurally analogous to a mutual fund, in which contract owner premiums are invested and from which the contract's accumulation value derives, with investment risk borne by the contract owner rather than by the carrier.
