Defined terms for the annuity market and lifetime income landscape.
An advanced life deferred annuity (ALDA) is a deferred income annuity structured as longevity insurance, characterized by an extended deferral period — typically fifteen years or more — and payments commencing at an advanced age such as 80 or 85, with a materially higher payment-per-dollar.
Adverse selection is the general insurance phenomenon in which individuals whose risk profile is unfavorable to a particular arrangement are more likely to enter it than those whose profile is favorable, producing a pool whose experience differs systematically from population averages.
An advisory account is a brokerage or platform account in which the financial professional is compensated through an ongoing fee assessed against the account's assets — typically a percentage of assets under management — and in which the professional generally operates under a fiduciary standard.
The affect heuristic is a decision shortcut in which an individual's overall emotional response to an option guides the evaluation of its risks and benefits, so that things liked emotionally are judged less risky and more beneficial than things disliked.
Affiliated reinsurance is reinsurance in which the ceding carrier and the reinsurer are part of the same corporate group, so that risk and assets transferred through the treaty move between affiliated entities within a single holding structure.
