Defined terms for the annuity market and lifetime income landscape.
The owner versus annuitant distinction is the structural separation in an annuity contract between the contract owner — the person with the legal rights to control the contract, including rights of withdrawal, surrender, beneficiary designation, and ownership transfer — and the annuitant, the person whose life is the measuring life for any life-contingent payments under the contract. Why it matters In most annuity contracts the owner and the annuitant are the same individual, and
A participation rate is the percentage of an underlying index's gain that is credited to an indexed annuity contract over a specified crediting period. Why it matters The participation rate is one of three primary parameters that determine how much of an index's movement reaches the contract owner; the other two are the cap rate and the spread. Naming the participation rate distinctly is what makes it possible to characterize how an indexed annuity is actually charging for the str
