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These terms cover annuities in general, and some specific
? Annuitant: One who
receives payments from an annuity contract.
? Annuity: A guaranteed yearly
allowance paid by an insurance company or other entity in consideration of a
lump sum payment (premium) for the contract. This yearly payment continues for a
set number of years or until the annuitant's death.
? Annuity units: Shares of an
annuity's separate account used to calculate payment from variable
? Fixed-dollar annuity: An annuity
with guaranteed equal payments.
? Individual retirement annuity:
An individual retirement account in the form of an annuity. It has contribution
and distribution regulations like traditional IRAs do.
? Joint annuity: An annuity
covering two or more people.
? Premium: An amount of money paid
to purchase an annuity contract. The amount varies according to the benefits
purchased. The premium can be either a lump sum payment or a series of
? Retirement annuity: An annuity
with funds intended for one's retirement. The premium is calculated to provide a
predicted future benefit.
? Tax-sheltered annuity: An
annuity with premiums (contributions) paid by pretax dollars from one's earned
income. Taxes on both contributions and earnings are thus "deferred" until
? Variable annuity: An annuity
with earnings and distributions that vary according to how well its investments
Some basic IRA terms are next.