An amount payable annually, or an agreement for an insurer to make regular payments for a specific period.
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Annuity analysis (Annuities)
An analysis that includes the annuity’s interest rate and how long that rate is promised, the offering company’s financial ranking, the expected monthly income, and other pertinent information.
Annuity certain
Contract that provides an income for a specific number of years, regardless of life or death.
Annuity consideration
Payment, or one of the regular periodic payments, an annuitant makes for an annuity.
Annuity deferral
See: INCOME DRAWDOWN; AGE 75 RULE.
Annuity period
Time between each benefit payment in an annuity contract.
Annuity taxation
The taxation of annuity and pension payments. The annuitant is taxed on only that part of his or her annuity which is regarded as interest. The balance, a return of capital, is taxfree. Retirement annuities (pensions) are taxed as earned income, but part of the benefits can be commuted to a tax free lump sum, often used to purchase an immediate life annuity a part of which is a return of capital and therefore tax free.
Annuity units
Ownership shares in a variable annuity’s separate account fund after the accumulation period ends. Annuity units are purchased with accumulation units and are used to establish benefit payment amounts. See also accumulation units.
Annul
To make or declare void or invalid, such as invalidating a contract of marriage.
ANSI 835
See: electronic remittance advice (ERA).