Defined terms for the annuity market and lifetime income landscape.
Break-even analysis in the annuity context calculates how long an individual would need to receive lifetime income payments from an annuity to recover the premium paid, used as a heuristic for evaluating whether the annuity is likely to be advantageous.
Breakeven inflation rate is the market-implied expectation of average future inflation, calculated as the difference between the yield on a nominal Treasury bond and the yield on a Treasury Inflation-Protected Security of the same maturity.
A broker, in the annuity context, is a licensed intermediary who represents the prospective buyer rather than a specific insurance carrier and is generally authorized to sell annuity contracts from multiple carriers, with compensation typically received as a commission paid by the issuing carrier.
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.
