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To ensure that consumers who are considering Allianz Life Insurance Company of North America (Allianz) are fully informed and knowledgeable, the following glossary provides brief descriptions of the terms and features associated with fixed annuities.
Accumulation phase: The period between the contract owner’s purchase of a deferred annuity and the beginning of the annuitization.
Accumulation value: During the accumulation period of a deferred annuity, the amount paid for the annuity, plus interest earned, less the amount of any withdrawals and fees.*
Annuitant: The person upon whose life expectancy the annuity payments are based. The contract owner names the annuitant. Once a contract is annuitized, the annuitant cannot be changed.
Annuitization: When a contract is annuitized, the issuing company makes payments based on the contract's value for a predetermined period or over a lifetime.
Annuity contract: A contract between an individual(s) or entity, and an insurance company. The contract states that in exchange for premium, the company agrees to pay an income in the future.*
Annuity date: The date on which an insurer begins to make periodic income payments under an annuity contract. Also known as the income date.*
Annuity period: The time span between each of the payments in the series of periodic payments made under an annuity contract.*
Beneficiary: The person(s) named by the contract owner to receive money upon the death of the owner. The contract owner can usually change beneficiaries at any time prior to annuitization.
Contract owner: The person or business that owns and exercises all rights and privileges of an annuity contract.*
Death benefit: A benefit that equals at least the amount of a deferred annuity's accumulation value and that is to be paid to a beneficiary designated by the contract owner if the contract owner dies before periodic income payments begin. Also known as a survivor benefit.*
Deferred annuity: Any annuity in which payments do not begin for at least one year. A deferred annuity can be either variable or fixed.
Fixed annuity: An annuity contract under which the insurer guarantees that (1) the contract's accumulation value will experience no loss of principal and will earn at least a minimum guaranteed interest rate, and (2) the periodic income payments will not fall below a stated minimum amount.*
Fixed index annuity: A type of annuity contract that offers certain principal and earnings guarantees, but also offers the possibility of fixed interest earnings by linking the contract to an equity index.*
Immediate annuity: An annuity that provides periodic income payments that generally are scheduled to begin one annuity period after the date the contract is issued.*
Life annuity with period certain: An annuity that guarantees that the insurer will make periodic income payments throughout the annuitant's life and guarantees that the payments will be made for at least a certain period, even if the annuitant dies before the end of that period.*
Life income option: A settlement option under which the insurance company agrees to pay the contract proceeds in periodic installments over the payee's lifetime.*
Payout options provision: An annuity contract provision that lists and describes each of the annuitization/payout options from which the contract owner may select.*
Payout period: The period during which an insurer makes periodic income payments under an annuity contract. Also known as liquidation period or annuitization period.*
Single-premium deferred annuity (SPDA) contract: A deferred annuity that is purchased with the lump-sum premium payment on the date the contract is issued.*
Surrender charge: The charge some annuity issuers assess for taking withdrawals in the early years of the contract. The fee is typically a percentage of each withdrawal.
Surrender value: The accumulation value of a deferred annuity contract less any surrender charges included in the contract. Also known as a withdrawal charge.*
Withdrawal charge: See surrender charge.*
Withdrawal provision: A deferred annuity contract provision that gives the contract owner the right to withdraw all or a portion of the annuity's accumulation value during the accumulation period.*
* Definitions for these commonly used terms related to annuities are sourced to Harriet E. Jones, “Principles of Insurance: Life, Health and Annuities,” 3rd Edition, 2005.
Visit https://www.allianzlife.com/ToolsInsights/Glossary.aspx for a complete glossary of annuity terms and features.
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