Defined terms for the annuity market and lifetime income landscape.
A life-only payout is an annuity payment structure in which income continues for the contract owner's lifetime and stops at the contract owner's death, with no residual value payable to beneficiaries and no guaranteed minimum payment period.
A long-term care rider is a rider on a deferred annuity that provides enhanced access to the contract's value — through accelerated withdrawals or extended benefits beyond the account value — when the contract owner meets specified long-term-care eligibility criteria, for a separate charge.
A longevity annuity is any deferred income annuity designed primarily as longevity insurance — typically with a deferral period of fifteen years or more and payments commencing at an advanced age — with the DIA and the advanced life deferred annuity (ALDA) as the two principal structural sub-types.
A market value adjustment is a contractual adjustment applied to a withdrawal or surrender from a deferred annuity, calculated by reference to changes in interest rates or a specified index between contract issue and the time of withdrawal, increasing or decreasing the payable amount.
Monthly sum crediting is an indexed annuity calculation method that measures the index's percentage change in each month of a crediting period, applies a monthly cap to each positive month, leaves negative months uncapped, and sums the twelve resulting figures to produce the period's index gain.
