|RAMs (Reverse-annuity mortgages)|
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Definition of RAMs (Reverse-annuity mortgages)
RAMs (Reverse-annuity mortgages)
mortgages in which the bank makes a loan for an amount equal to a
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.
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.
An annuity providing for income payments to commence at a specified future time.
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
GEMs (growing-equity mortgages)
mortgages in which annual increases in monthly payments are used to
Graduated-payment mortgages (GPMs)
A type of stepped-payment loan in which the borrower's payments
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
Reverse price risk
A type of mortgage-pipeline risk that occurs when a lender commits to sell loans to an
In essence, refers to a repurchase agreement. From the customer's perspective, the customer
Reverse stock split
A proportionate decrease in the number of shares, but not the value of shares of stock
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Under Ginnie Mae, mortgage funds provided at below-market rates to residential
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.
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