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Definition of Deferred Annuity
An annuity providing for income payments to commence at a specified future time.
An insurance policy bought by the sponsor of a pension plan for a single
A monthly fixed-dollar payment beginning at retirement age. It is nominal
Sometimes called seg funds, segregated funds are the life insurance industry equivalent to a mutual fund with some differences.The term "Mutual Fund" is often used generically, to cover a wide variety of funds where the investment capital from a large number of investors is "pooled" together and invested into specific stocks, bonds, mortgages, etc.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
A regular periodic payment made by an insurance company to a policyholder for a specified period
A series of payments or deposits of equal size spaced evenly over
A series of payments over a period of time. The payments are usually
Equally spaced level stream of cash flows.
A contract which provides an income for a specified period of time, such as a certain number of years or for life. An annuity is like a life insurance policy in reverse. The purchaser gives the life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income, usually monthly.
Periodic payments made to an individual under the terms of the policy.
An annuity with n payments, wherein the first payment is made at time t = 0 and the last
annuity where the payments are to be made at the beginning of
a series of equal cash flows being received or paid at the beginning of a period
Level stream of cash flows starting immediately.
Present value of $1 paid for each of t periods.
Present value of an annuity of $1 per period.
Annuity in arrears
An annuity with a first payment on full period hence, rather than immediately.
The time between each payment under an annuity.
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Tax-advantaged life insurance product. deferred annuities offer deferral of taxes with the
A provision that prohibits the company from calling the bond before a certain date. During this
pay related to current performance
A common term for convertible bonds because of their equity component and the
The most distant months of a futures contract. A bond that sells at a discount and does not
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
Guaranteed Interest Annuity (GIA)
Interest bearing investment with fixed rate and term.
Individual Retirement Annuity
An IRA comprised of an annuity that is managed
Normal annuity form
The manner in which retirement benefits are paid out.
An annuity where the payments are made at the end of each
a series of equal cash flows being received
RAMs (Reverse-annuity mortgages)
Mortgages in which the bank makes a loan for an amount equal to a
current compensation that is taxed at a future date
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
Registered Retirement Savings Plan (Canada)
Commonly referred to as an RRSP, this is a tax sheltered and tax deferred savings plan recognized by the Federal and Provincial tax authorities, whereby deposits are fully tax deductable in the year of deposit and fully taxable in the year of receipt. The ability to defer taxes on RRSP earnings allows one to save much faster than is ordinarily possible. The new rules which apply to RRSP's are that the holder of such a plan must convert it into income by the end of the year in which the holder turns age 69. The choices for conversion are to simply cash it in an pay full tax in the year of receipt, convert it to a RRIF and take a varying stream of income, paying tax on the amount received annually until the income is exhausted, or converting it into an annuity with guaranteed payments for a chosen number of years, again paying tax each year on moneys received.
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