Defined terms for the annuity market and lifetime income landscape.
A required minimum distribution (RMD) is the minimum amount an individual must withdraw each year from a tax-advantaged retirement account beginning at a statutory age, calculated based on the account balance and the individual's remaining life expectancy under IRS tables.
A return of premium rider is a rider attached to a deferred annuity that guarantees the contract owner or beneficiary will receive at least the total premium paid into the contract, less any prior withdrawals, regardless of the account value or the cumulative income payments made.
A roll-up rate is the contractually specified annual rate at which the benefit base of a deferred annuity rider increases during a defined accumulation period, separate from and independent of the contract's actual investment performance.
A separate account is a legally distinct pool of assets maintained by an insurance carrier — segregated from the general account — that holds subaccount investments supporting variable annuity and RILA contracts, dedicated to those contracts and unavailable to general creditors in insolvency.
A single premium annuity is any annuity contract funded by a single lump-sum premium payment at issue, with no provision for subsequent premium contributions — the structural alternative to a flexible-premium annuity, which accepts premium contributions over an extended accumulation period.
