Defined terms for the annuity market and lifetime income landscape.
A broker-dealer is a firm registered with the SEC and a member of FINRA that is authorized to buy and sell securities on behalf of customers, and through which registered representatives distribute variable annuities and registered index-linked annuities that are subject to securities-law oversight.
Bucket strategy is a retirement income approach that segments savings into time-horizon-based portions — a near-term cash bucket, a middle bucket in intermediate bonds, and a long-term bucket in growth assets — with withdrawals from the shortest bucket and refills from the longer ones.
A buffer, in the registered index-linked annuity context, is a contractually defined amount of negative index return that the carrier absorbs before any loss is passed to the contract owner, typically expressed as a percentage of the index decline over a crediting period.
A C-share variable annuity is a share class of variable annuity that carries no surrender charge schedule — providing the contract owner with full liquidity from contract issue — in exchange for a higher ongoing mortality and expense charge than the surrender-charge-bearing share classes carry.
A cap rate is the maximum credit that an indexed annuity contract can receive from an underlying index over a specified crediting period, regardless of how much the index actually rises.
