Defined terms for the annuity market and lifetime income landscape.
Nominal interest rate is the interest rate stated on a financial instrument or contract without adjustment for expected inflation, expressed in dollar terms rather than purchasing power.
A non-ergodic system is a system in which the time average and the ensemble average of an outcome differ — the average outcome experienced by a single agent over time is not equal to the average outcome across many agents at a single moment.
A non-qualified annuity is an annuity contract funded with after-tax dollars held outside any tax-advantaged retirement account, where only the earnings portion of each distribution is taxed as ordinary income and the return of the original premium is tax-free.
The nonforfeiture benefit is the contractually guaranteed minimum value that a contract owner can recover from a deferred annuity, established under state nonforfeiture law and operating as a floor on the amount the carrier may charge through surrender charges and other cost-structure mechanisms.
Offshore reinsurance is reinsurance in which the reinsurer is domiciled outside the ceding carrier's home regulatory jurisdiction — typically in Bermuda, the Cayman Islands, or another jurisdiction with a distinct regulatory and capital regime.
