Glossary

Annuity payment options are the menu of structural choices a contract owner selects from at annuitization, each of which produces a different payment stream from the same premium by varying duration, survivor protection, and contractual residual to beneficiaries. Why it matters The selection among annuity payment options is the irrevocable decision that determines what the annuitized contract pays, to whom, for how long, and under what contingencies. Each option produces a differe

Annuity payments are the periodic income amounts an insurer pays to the contract owner under an annuitized contract, scheduled at a fixed frequency — most commonly monthly — and continuing under terms specified in the contract, typically for the lifetime of the contract owner. Why it matters The annuity payment is the contract's deliverable — the actual income stream the contract owner receives in exchange for the premium paid. The size, frequency, duration, and conditions of the

Annuity persistency is the rate at which annuity contracts remain in force over time without being surrendered, lapsed, annuitized into income, or otherwise terminated, typically measured as a percentage of contracts (or premium dollars) remaining in force at successive contract anniversaries. Why it matters Annuity persistency is a structural fact about the in-force book of a carrier — it shapes the carrier's investment yield economics, its reserve adequacy, and the pricing it ca

The annuity puzzle is the long-standing observation that standard expected-utility theory predicts most retirees should annuitize substantial portions of their wealth to insure against longevity risk, while in practice only a small fraction of retirees voluntarily annuitize — a gap between predicted and observed behavior that has generated an extensive academic literature seeking to explain it. Why it matters The annuity puzzle is the single most heavily theorized question in reti