Accumulation Phase: The period of time during which the policyholder is making payments into the annuity contract, but income payments have not yet begun.
Accumulation Value: The current value of the annuity contract that includes any interest, dividends, or other gains earned on the premium paid.
Age: The natural person’s attained age on the day the form is completed.
Annual Income: Income received during a calendar year, whether earned or unearned.
Annual Percentage Yield (APY): The annual rate of return on an annuity, taking into account the interest rate and any additional growth.
Annual Renewable Term: An option in which the contract is renewed each year, and the premium and the benefits are adjusted accordingly.
Annuitization: The process of converting the value of an annuity contract into a stream of payments.
Annuitization Options: The choices available to the policyholder when converting the accumulated value of the annuity contract into an income stream. These options may include a fixed period, a lifetime income, or a joint and survivor option.
Annuity: A financial contract that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.
Annuity Factor: A mathematical calculation used to determine the present value of an annuity, which is used to set the income stream payments.
Annuity Maturity Date: The final date of termination of the contract at which time the proceeds of the contract must be paid out.
Annuity Settlement Option: the way the policyholder wishes to receive the income from the annuity contract, it can be a lump sum, a series of payments, or an income stream.
Automatic Premium Deposit: An option that allows the policyholder to set up automatic premium payments, rather than making manual payments
Beneficiary: The individual or individuals designated by the policyholder to receive the death benefit or other benefits from the annuity contract.
Bonus Interest: Additional interest credited to the contract value, often as an incentive for purchasing the annuity.
Cap Rate: The maximum interest rate that the policyholder can earn in an indexed annuity.
Cash Value: The accumulated value of an annuity contract, including any interest or investment returns.
Contract Value: The value of the annuity contract, which is determined by the premium paid, any interest or investment returns, and any charges or fees.
Cost of Insurance (COI): The cost of the insurance component of an annuity contract, which is typically a fixed percentage of the premium.
Death Benefit: A feature offered by some annuity contracts that provides a payment to the beneficiaries of the policyholder in the event of their death.
Deferred Annuity: An annuity that allows the policyholder to make payments over time before the income stream begins.
Early Withdrawal Penalty: A fee that may be imposed if the policyholder withdraws money from the annuity contract before the income payments have begun or before a certain period of time has passed.
Equity-Indexed Annuity: An annuity option that provides a fixed interest rate and also links the interest rate to an equity index such as the S&P 500.
Existing Assets: Financial assets including life insurance and annuities.
Existing Liquid Net Worth: Applicable to those net assets that can readily be converted into their cash equivalent,
without loss of principal after all surrender charges or other deductions have been taken.
Financial Objectives: The owner’s stated goals as described to the insurance agent or insurer, if no insurance agent is involved. These may include but are not limited to the following: (1) Income, (2) Growth (long term capital appreciation), (3) Safety of Principal and Income, (4) Safety of Principal and Growth, (5) To pass the investment to a
beneficiary or beneficiaries at death.
Flexible Premium Annuity: An annuity option that allows the policyholder to make additional premium payments after the initial purchase of the contract.
Floor Rate: The minimum interest rate that the policyholder will earn in an indexed annuity, regardless of the performance of the underlying index.
Fixed Annuity: An annuity that pays a fixed interest rate on the premium, resulting in a fixed stream of income.
Fixed Indexed Annuity: An annuity option that uses a stock market index as a benchmark for the interest rate, rather than a fixed rate.
Form of Ownership: The type of entity, other than a natural person, including a corporation, trust, partnership, limited
liability company, or other business or not-for-profit entity.
Free-Look Period: A period of time, typically 10 to 30 days, during which the policyholder can review the annuity contract and decide to cancel it without penalty.
Generic Contract Type: The generic name of the annuity contract form as approved by the Florida Office of Insurance Regulation. Examples of generic annuity contract names are Flexible Premium Equity Indexed Annuity (FPEIDA), Single Premium Immediate Annuity (SPIA), Flexible Premium Variable Deferred Annuity (FPVDA), and Single Premium Deferred Annuity (SPDA).
Guaranteed Minimum Income Benefit (GMIB): A feature offered by some annuity contracts that guarantees a minimum income stream for the policyholder, even if the value of the contract decreases.
Guaranteed Minimum Interest Rate: A minimum interest rate that is guaranteed by the insurance company, regardless of the performance of the underlying investments.
Guaranteed Minimum Withdrawal Benefit (GMWB): A feature offered by some annuity contracts that guarantees a minimum amount that can be withdrawn from the contract each year, regardless of the value of the contract.
Immediate Annuity: An annuity that begins paying out income immediately after the purchase of the contract.
Income Rider: An optional feature that guarantees a minimum income stream for the policyholder, regardless of the performance of the underlying investments.
Index Credit: The amount of interest credited to the policyholder’s account based on the performance of the index that the contract is linked to.
Indexed Annuity: An annuity that provides a minimum guaranteed interest rate and also links the interest rate to an equity index such as the S&P 500, offering the potential for higher returns.
Inflation Protection: An option offered by some annuity contracts that increases the income stream payments over time to account for inflation.
Joint and Survivor Annuity: An annuity option that provides an income stream for both the policyholder and their spouse, with the income stream continuing for the surviving spouse after the policyholder’s death.
Lifetime Annuity: An annuity option that provides an income stream for the lifetime of the policyholder.
Lifetime Income Benefit Rider: An optional feature that allows the policyholder to convert the cash value of the contract into a guaranteed lifetime income stream.
Living Benefit Rider: An optional feature that allows the policyholder to access the cash value of the contract to pay for long-term care expenses or other qualified expenses.
Long-Term Care Rider: An optional feature that allows the policyholder to use the cash value of the contract to pay for long-term care expenses.
Managed Payout Option: An option that allows the policyholder to choose a specific income stream and have the insurance company manage the investment of the contract to meet that income stream.
Marketing Name: The name adopted by the insurer to identify the contract form.
Minimum Distribution Requirement: The minimum amount that must be withdrawn from the annuity contract each year, as set by the IRS.
Minimum Premium: The minimum amount of money that must be paid to purchase the annuity contract.
Net Asset Value (NAV): The value of the underlying investments in a variable annuity, used to calculate the value of the contract.
Non-Forfeiture Option: The option of cashing out the contract value in case of surrender.
Nursing Home Waiver of Premium Rider: An optional feature that waives premium payments if the policyholder is confined to a nursing home.
Participation Rate: The percentage of the index performance that is credited to the policyholder’s account on an indexed annuity.
Payout Phase: The period of time during which the policyholder is receiving income payments from the annuity contract.
Period Certain Annuity: An annuity option that provides an income stream for a certain period of time, regardless of the policyholder’s lifespan.
Premium: The amount of money paid to purchase an annuity contract.
Premium Bonus: An extra amount of money added to the contract value by the insurance company.
Qualified Contract: A product used to fund any type of pension plan approved by the Internal Revenue Service.
Qualified Longevity Annuity Contract (QLAC): A type of annuity that is specifically designed to provide income during the policyholder’s retirement years and can be used to meet the required minimum distribution (RMD) rules for retirement accounts.
Return of Premium Death Benefit: A feature offered by some annuity contracts that returns the premium paid into the contract to the beneficiaries in the event of the policyholder’s death before the income payments have begun.
Rider: An optional feature that can be added to an annuity contract for an additional cost, providing additional benefits such as long-term care coverage.
Risk Tolerance: The degree of uncertainty that an investor can reasonably tolerate with regard to a negative change in his or her investments. Examples of risk tolerance levels may include the following: (1) Conservative (prefer little or no risk), (2) Moderately conservative (some risk, reduced safety of principal), (3) Moderate (average risk with potential losses and potentially higher returns), (4) Moderately aggressive (above average risk with potential losses, risk of principal and potentially higher returns), (5) Aggressive (willing to sustain losses or loss of principal in pursuit of higher returns).
Roll-up Rate: The rate of interest credited to the contract value of an indexed annuity when the policyholder does not make any withdrawals.
Single Premium Immediate Annuity: An annuity option that provides an income stream immediately after the purchase of the contract with a single premium payment.
Source of Funds: Used to purchase the proposed annuity means from where the funds will come to purchase the annuity, and may include but are not limited to; (1) An existing annuity or life insurance contract, (2) Liquid Assets, including but not limited to, cash in banks, maturing certificates of deposit, and money market accounts, (3) Personal Loans, (4) Equity Loans, (5) Mortgages, Reverse Mortgages, (6) Death Benefit Proceeds, (7) Funds received upon retirement from employment, including but not limited to, 401(k) accounts, pensions, and other tax-sheltered funds, (8) Equities, mutual funds, or bonds, (9) Proceeds from real estate transactions.
Split Annuity: An annuity option that allows the policyholder to split their premium between two or more annuity contracts for more flexibility in their income stream.
Spousal Continuation Option: An option that allows a surviving spouse to continue receiving an income stream from the contract in the event of the policyholder’s death.
Step-Up Annuity: An annuity that allows for an increase in the income stream payments over time, typically on an annual basis.
Supporting Documents: The documents that provide a basis for the relationship between the Proposed Annuitant,
and the Owner as it may exist.
Surrender Charge: A fee that may be imposed if the policyholder withdraws money from the annuity contract before a certain period of time has passed.
Surrender Value: The cash value of the contract available to the policyholder if they decide to terminate the contract before the income payments have begun.
Tax-Free Exchange: A feature that allows the policyholder to exchange an annuity contract for another annuity contract without incurring taxes on the transaction.
Tax-Deferred: An option offered by some annuity contracts that allows the policyholder to postpone paying taxes on the income stream payments until they are withdrawn.
Tax Status: The owner’s Federal Income Tax filing status such as “single” or “married filing jointly”; if “Exempt”, so
state.
Terminal Illness Rider: An optional feature that allows the policyholder to access the cash value of the contract to pay for medical expenses if they are diagnosed with a terminal illness.
Variable Annuity: An annuity that allows the policyholder to invest their premium in a variety of investment options, resulting in a variable stream of income.
Waiver of Premium Rider: An optional feature that waives premium payments if the policyholder becomes disabled.
Withdrawals: The process of taking money out of the annuity contract, which may be subject to penalties or charges if done before a certain period of time has passed or before the income payments have begun.
Yield: The return on an annuity, typically expressed as a percentage of the premium.
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