Defined terms for the annuity market and lifetime income landscape.
A premium bonus is an amount credited by the carrier to a deferred annuity contract at issue or on additional premiums, expressed as a percentage of the premium and added to the accumulation value, funded through some combination of declared-rate adjustment, schedule extension, and embedded spread.
Present bias is the tendency for individuals to give disproportionate weight to immediate rewards and costs relative to those in the future, producing choices that favor the near term more than a consistent time preference would predict.
Present value is the amount that a future sum of money is worth today after accounting for the return that could be earned on money in the interim, converted using a discount rate that reflects the time value of money.
Private credit in insurance general accounts is the practice of allocating a portion of an insurance carrier's general account assets to directly originated or privately placed loans — typically middle-market direct lending, asset-based finance, or other non-traded credit holdings.
