Commonly Used Terms for Immediate, Deferred, Fixed, Variable Annuities
There is a great deal of terms associated with insurance and financial products. While you don’t need to understand everyone there are a few you really should be familiar with. This is especially true when it comes to annuity products due to the wide variety of types available. There is a very big difference between a fixed annuity and a variable annuity and as such you want to understand the ramifications of each.
The biggest obstacle you will need to overcome when buying an annuity is the fact you most likely have never purchased one before. Once you have bought a particular item multiple times you are much better versed in the language, and the most important elements to pay attention to.
With that we have defined several important terms here and provided a link to a site that can offer definitions on just about every term.
- Agent
- When you purchase an annuity it is going to be from an insurance agent. Annuities are a regulated product which means that the people that sell them must be licensed in the state you live in order to sell that product. There are different degrees of licenses. For example you need a further license to sell a variable annuity than a fixed, because there is more risk associated with that product.
- Points
- Some times in an annuity transaction there will be points involved. A point represents 1%, of the total transaction amount.
- Annuity Date
- This will be the date at which the payments from the annuity, to you, will begin.
- Free Look Period
- This is an amount of time, generally 30 days or less, where you may cancel the annuity contract you have entered into if you would like to change your mind.
- Non-Qualified Annuity
- An annuity that was purchased with money you earned, that has already been taxed.
- Withdrawal Charge
- This is a penalty, or charge you would have to pay if you were to withdraw money from your annuity prior to it’s completion date.
Further areas of Annuity Information
Met Life has a good list of annuity terms if you need to look up some you are unfamiliar with.
Privacy Policy ©2202-2008, Annuity-Central.com, All rights reserved.
