Split-Funded Annuity
Definition
- A grouping of two separate annuities, one an immediate payout annuity and the other a deferred annuity; a portion of the principal is immediately paid back to the annuitant in the form of regular income payments, while another portion is set aside and invested for future repayment.
Synonyms
annuity ladder
Related Terms and Acronyms
- Accumulation Period (AP) — Acronym, Important,
- The period where an investor continues to put money into his or her investment(s).
- 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 Ladder — Definition,
- A financial plan to purchase multiple annuities from different companies over a number of years in order to minimize interest rate risk and the risk of a total loss.
- Cash Refund Annuity — Definition,
- An annuity that refunds any remaining balance to the beneficiaries or the annuitant's estate when the annuitant dies.
- Deferred Annuity — Definition,
- An annuity that makes payments to the annuitant at some date in future instead of immediately.
- Fixed Annuity — Definition,
- An annuity that makes fixed payments to the annuitant with guarantees for earnings and principal.
- Hybrid Annuity — Definition,
- An annuity with both fixed and variable annuity elements.
- Immediate Payment Annuity — Definition,
- An annuity where payments to the annuitant start immediately after the annuity has been set up.
- Laddering — Definition,
- Staggering deposits into investments such as CDs in order to vary and better the rate of return.
- Life Expectancy Method — Definition,
- A method of calculating the appropriate size of payments in an annuity's income phase by estimating the annuitant's life expectancy.
- 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.
- Payout Phase — Definition,
- The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
- 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.
- Wraparound Annuity — Definition,
- An annuity that allows the annuitant to control how funds in the annuity are invested.
