The annuity payment follows the fortunes of the value of the underlying assets. Consequently income can rise or fall. The fund may benefit from increased bonuses declared in future years and the annuitant selects at the outset a future bonus rate, typically up to 5 per cent of the fund, but if the selected rate is not achieved the income will fall. Some providers offer guaranteed minimum income payments.
Insurance Encyclopedia
With-profits bond
Single premium life policies invested in the insurer’s with profits fund made up of investment in company shares, fixed interest securities, commercial property, cash, etc. High tax payers can benefit by withdrawing 5 per cent each year for 20 years without an immediate tax liability as the IR treat it as a return of capital. Annual reversionary bonuses are added and a terminal bonus is paid out at maturity.
With-profits policies
Whole life policies and endowment policies that attract bonuses representing a share in the profits (see divisible surplus). The bonuses are declared each year and become a guaranteed addition to the sum assured at death or maturity.
Withdrawal
1. Pertaining to voluntary ending of an insurance agreement by the insured (policyholder). 2. Related to a provider withdrawing from treating a patient.
Withdrawal provision
Clause in a universal life insurance or annuity policy that allows the policy owner to reduce the amount in the policy’s cash value by taking that amount in cash. Also known as partial surrender provision .
Withdrawal reinsurance
See: REINSURANCE WITHDRAWAL.
Withhold
1. Portion of the monthly capitation payment to physicians retained by the health maintenance organization (HMO) until the end of the year to create an incentive for efficient care. If the physician exceeds utilization norms, he or she will not receive it. Also called withhold incentive . 2. Percentage of payment or set dollar amounts that are deducted from the payment to the physician group/physician that may or may not be returned depending on specific predetermined factors.
Withhold fund
Account established to cover use of medical services that exceed the managed care plan budget. The funds are given to participating providers when medical services do not exceed the budget.
Withhold incentive
See: withhold .
Withhold pool
Total amount that a health maintenance organization (HMO) retains from the providers’ payments until the end of the year. Cost of referrals and medical services that are considered excessive are held back by the HMO.