Defined terms for the annuity market and lifetime income landscape.
Deferred acquisition cost (DAC) is the GAAP balance-sheet asset created when an insurance carrier capitalizes the costs of acquiring new business — commissions, underwriting, issue expenses — rather than expensing them, with the asset amortized against the revenue stream over the contract life.
A deferred annuity is any annuity contract in which income payments commence at a future date rather than at issue, encompassing fixed deferred annuities, multi-year guaranteed annuities, fixed indexed annuities, registered index-linked annuities, and deferred income annuities.
A deferred fixed annuity is a fixed annuity contract structured with an accumulation phase during which the contract value grows at a declared crediting rate set by the carrier, followed by an optional distribution phase in which the value can be annuitized, surrendered, or held.
A deferred income annuity (DIA) is a lifetime income arrangement in which the contract owner pays a premium to an insurer in exchange for periodic income payments that begin at a specified future date and continue for the contract owner's lifetime or another specified payout structure.
