Defined terms for the annuity market and lifetime income landscape.
Payout rate is the annual income a lifetime income arrangement pays expressed as a percentage of the premium or account value used to purchase it, and is the single figure most commonly used to compare annuity quotes at first glance.
A penalty-free withdrawal from an annuity is a distribution that qualifies for one of the statutory exceptions to the 10% additional tax on early distributions, avoiding the surcharge that otherwise applies to taxable distributions taken before the contract owner reaches age 59½.
