Inflation-Protected Annuity

Definition

• An annuity contract where the rate of return is guaranteed to be equal to or above that of the rate of inflation. An inflation-protected annuity ensures that the purchasing power of an annuitant's retirement income does not decrease over time.

Synonyms
inflation rider, inflation shielded annuity, inflation protection rider

Related Terms and Acronyms

• Annuity — Definition,
  • A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
  • A financial instrument that disperses a number of payments over a set period of time.
• Annuity Contract — Definition,
  • A contract that outlines each party's responsibilities as they relate to an annuity.
• Deferred Annuity — Definition,
  • An annuity that makes payments to the annuitant at some date in future instead of immediately.
• Disinflation — Definition,
  • A reduction in the inflation rate as a result of either government policy or a decline in economic activity.
• Indexed Annuity — Definition,
  • An annuity where investment performance is pegged to a stock index.
• Inflation — Definition,
  • A rise in the average level of prices in the economy.
• Inflation Protection — Definition,
  • A protection found in some insurance policies that allows policy limits to increase with inflation.
• Life Annuity — Definition,
  • An annuity that will continue to make payments until the death of the annuitant.
• Maturity Guarantee — Definition,
  • A guarantee that after a certain date a contract, such as a life insurance policy or annuity, will have a minimum dollar value.
• Return — Definition,
  • Any increase in value or in income you earn on purchase or investment.
• Secondary Market — Definition,
  • A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
• Security — Definition,
  • Property designated as collateral.
  • A document stating ownership of a stock or bond.
  • A tradable financial implement that represents ownership, the rights to ownership or debt.
• Stock — Definition,
  • A share of the ownership of a company.
• Variable Annuity (VA) — Acronym,
  • An annuity where the payments received by the annuitant in the income phase of the annuity vary depending on how well the insurer's investment portfolio has performed.