Defined terms for the annuity market and lifetime income landscape.
Annual reset is a fixed indexed annuity crediting structure in which the index value is reset at each contract anniversary, with credited interest calculated from the index's movement during that annual period and locked in at the end, after which a new annual period begins from that reference.
Annuitization is the conversion of a sum of capital into a stream of periodic income payments, typically continuing for the lifetime of the contract owner, in exchange for surrendering the right to access the capital as a lump sum.
An annuity is an insurance contract under which an individual exchanges premium for a contractual right to a stream of future payments, typically continuing for the lifetime of the contract owner, with the specific structural features and costs determined by the type of arrangement chosen.
The annuity date is the contractually specified date on which a deferred annuity is scheduled to begin making income payments unless the contract owner elects otherwise, marking the transition from the accumulation phase to the distribution phase.
Annuity payments are the periodic income amounts an insurer pays to the contract owner under an annuitized contract, scheduled at a fixed frequency — most commonly monthly — and continuing under terms specified in the contract, typically for the lifetime of the contract owner.
