Defined terms for the annuity market and lifetime income landscape.
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 straight life annuity is a lifetime income contract paying income for the contract owner's lifetime and stopping at death, with no beneficiary payments and no guaranteed minimum payment period.
Stretch provisions were the pre-SECURE Act rules that allowed a non-spouse beneficiary of an inherited retirement account or annuity to take required minimum distributions over the beneficiary's own life expectancy, extending tax deferral across the beneficiary's remaining lifetime.
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.
