Defined terms for the annuity market and lifetime income landscape.
A fixed annuity is an insurance contract under which the insurer guarantees the principal and a specified or formula-determined interest crediting rate, with values not subject to direct market fluctuation, structured either as an accumulation arrangement or as an income arrangement.
A fixed indexed annuity (FIA) is a deferred fixed annuity in which the crediting rate is determined by a formula tied to the performance of a specified market index, subject to caps, participation rates, and spreads set by the insurer, with principal protected from direct market loss.
The free look period is a defined window of time, typically beginning at delivery of a deferred annuity contract, during which the contract owner can return the contract for a full refund of premium without incurring any surrender charge, market value adjustment, or other cost.
A free withdrawal provision is a contractual feature of a deferred annuity that allows the contract owner to withdraw a defined amount each year during the surrender period without incurring a surrender charge, typically expressed as a percentage of the account value.
The general account is the pool of an insurer's assets that supports its non-separate-account liabilities — fixed annuities, immediate annuities, and the fixed components of variable annuities — with the contract owner holding a contractual claim against those assets rather than direct ownership.
