Defined terms for the annuity market and lifetime income landscape.
Planning horizon risk is the risk that an individual using solo drawdown selects a chosen planning age and outlives it, exhausting savings before death, and is the specific form longevity risk takes when income is bounded by a self-selected horizon rather than paid for life.
Point-to-point crediting is an indexed annuity calculation method that measures the change in an underlying index between two specific dates — typically the start and end of a crediting period — and uses that change as the basis for the credit applied to the contract.
A policy loan against an annuity contract is a loan from the carrier to the owner using the contract's cash value as collateral, with the loan balance reducing amounts available on withdrawal, surrender, or death, and with tax treatment differing materially from life insurance policy loans.
Policyholder surplus is the term used in US insurance statutory accounting for the excess of an insurance carrier's admitted assets over its liabilities, equivalent in most contexts to statutory surplus and named to emphasize that the surplus stands behind obligations to contract owners.
