What Are Annuities? estate that is An annuity is just the opposite of life insurance. Life insurance is the systematic accumulation of an used for protection against financial loss resulting from premature death. In contrast, annuities are a means of securing a steady cash flow during retirement. period The period in which the premiums are paid toward the purchase of an annuity is called the The period when the annuity payments are made is called the paid by the individual buying the annuity (called the are the principal and interest has not been returned, it is referred to as the period. The principal is the premium ). Interest is earned between the time annuities accruing tax free but paid for with after-tax dollars. If any portion of benefit. Terminology: Annuities ft with the Match the terms relating to the basic terminology and concepts associated with annuities on the le descriptions of the terms on the right. Read each description carefully and Answer column next to the correct term type the letter of the description in the These are not necessanily complete definitions, but there is only one possible answer for each term. Description Answer Term Single premium annuityA. This type of guaranteed-minimum annuity guarantees the contract purchaser a stated amount of monthly income for life in exchange for agreeing to pay a minimum number of years. Immediate annuity 8. This is the portion of principal and interest not returned before the purchaser dies Installment premiumC. The purchaser receives a specified amount of income for life, without regard to the distribution period and with the contract terminating upon death annuity contract Survivorship benefitD. This annuity's monthly income varies as a function of the insurer's actual investment experience. E. For this annuity, the insurance company agrees to pay a Deferred annuity guaranteed interest rate on your money F. Starting with regular payments (monthly, quarterly, annually) and Pure life as low as $100, this annuity is purchased over an extended period of time. Life annuity, periodG. This type of contract allows cash benefits to be stretched for certain several years. H. This annuity allows the purchaser to receive monthly benefits Annuity certain immediately I. This type of annuity pays a set amount of monthly income for a Fixed-rate annuity specified number of years for the insured and beneficiaries . A lump-sum payment purchases this annuity Variable annuity What Are Annuities? estate that is An annuity is just the opposite of life insurance. Life insurance is the systematic accumulation of an used for protection against financial loss resulting from premature death. In contrast, annuities are a means of securing a steady cash flow during retirement. period The period in which the premiums are paid toward the purchase of an annuity is called the The period when the annuity payments are made is called the paid by the individual buying the annuity (called the are the principal and interest has not been returned, it is referred to as the period. The principal is the premium ). Interest is earned between the time annuities accruing tax free but paid for with after-tax dollars. If any portion of benefit. Terminology: Annuities ft with the Match the terms relating to the basic terminology and concepts associated with annuities on the le descriptions of the terms on the right. Read each description carefully and Answer column next to the correct term type the letter of the description in the These are not necessanily complete definitions, but there is only one possible answer for each term. Description Answer Term Single premium annuityA. This type of guaranteed-minimum annuity guarantees the contract purchaser a stated amount of monthly income for life in exchange for agreeing to pay a minimum number of years. Immediate annuity 8. This is the portion of principal and interest not returned before the purchaser dies Installment premiumC. The purchaser receives a specified amount of income for life, without regard to the distribution period and with the contract terminating upon death annuity contract Survivorship benefitD. This annuity's monthly income varies as a function of the insurer's actual investment experience. E. For this annuity, the insurance company agrees to pay a Deferred annuity guaranteed interest rate on your money F. Starting with regular payments (monthly, quarterly, annually) and Pure life as low as $100, this annuity is purchased over an extended period of time. Life annuity, periodG. This type of contract allows cash benefits to be stretched for certain several years. H. This annuity allows the purchaser to receive monthly benefits Annuity certain immediately I. This type of annuity pays a set amount of monthly income for a Fixed-rate annuity specified number of years for the insured and beneficiaries . A lump-sum payment purchases this annuity Variable annuity
