Defined terms for the annuity market and lifetime income landscape.
Inflation risk is the possibility that rising general price levels erode the real purchasing power of a lifetime income stream over the planning horizon, particularly where the income is fixed in nominal terms.
Inflation-adjusted income is lifetime income whose payment amount increases over time according to a specified inflation index or fixed escalation rate, designed to maintain purchasing power as prices rise.
An installment refund annuity is a payout structure in which the insurer makes scheduled income payments for the contract owner's lifetime and, at the annuitant's death, continues the same scheduled payments to a designated beneficiary until the cumulative total paid equals the original premium.
