Plain‑English definitions for the most important annuity, retirement income, and indexing terms. Use the search or A–Z filters. Educational only — verify specifics in product disclosures.
An independent insurer financial strength opinion. One of multiple rating agencies; use in context with others (S&P, Moody’s, Fitch) rather than alone.
Irrevocably converting annuity value into a guaranteed income payment stream. Modern planning often uses withdrawal riders instead instead of full annuitization.
The amount of after‑tax dollars contributed. Determines taxability of future withdrawals (exclusion ratio for immediate annuities; LIFO for deferred non‑qualified annuities).
The maximum interest credit for a period under a capped index crediting method. If index return exceeds the cap, credited interest is limited to the cap.
Obligation (when applicable) to act in the client’s best interest—different from suitability. Not all annuity transactions occur under a strict fiduciary engagement.
Adjustment (positive or negative) applied to certain withdrawals or surrenders during the surrender period to reflect interest rate environment changes.
Upfront or vesting credit applied to the contract (account value or benefit base). Often offset by lower renewal caps/pars or longer surrender schedule.
The caps, participation rates, or spreads a carrier sets after the initial crediting period. Core to long‑term performance; avoid judging solely on new‑business teaser rates.
