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Definition of Variable Annuity
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.
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.
Continuous random variable
A random value that can take any fractional value within specified ranges, as
an unknown item for which a linear programming
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
an unknown variable that is to be predicted
Discrete random variable
A random variable that can take only a certain specified set of discrete possible
A value determined within the context of a model.
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
A variable whose value is determined outside the model in which it is used. Also called
Guaranteed Interest Annuity (GIA)
Interest bearing investment with fixed rate and term.
a variable that, when changed, will
Individual Retirement Annuity
An IRA comprised of an annuity that is managed
a critical factor that management believes will
Normal annuity form
The manner in which retirement benefits are paid out.
Normal random variable
A random variable that has a normal probability distribution.
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
A function that assigns a real number to each and every possible outcome of a random experiment.
Costs that have both fixed and variable components.
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
a variable used in a linear programming problem
a variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints
A value determined within the context of a model. Also called endogenous variable.
annuity contracts in which the issuer pays a periodic amount linked to the investment
A cost that is directly proportional to the volume of output produced. When production is zero,
A cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services.
a cost that varies in total in direct proportion
A cost that changes in amount in relation to changes in a related activity.
variable cost ratio
the proportion of each revenue dollar
A method of costing in which only variable production costs are treated as product costs and in which all fixed (production and non-production) costs are treated as period costs.
a cost accumulation and reporting method
Costs that change as the level of output changes.
Those that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc.
Expenses that change with changes in either sales volume
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
variable overhead efficiency variance
the difference between budgeted variable overhead based on actual input activity and variable overhead applied to production
variable overhead spending variance
the difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity
Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
Variable rate CDs
Short-term certificate of deposits that pay interest periodically on roll dates. On each roll
Variable rate loan
Loan made at an interest rate that fluctuates based on a base interest rate such as the
Variable rated demand bond (VRDB)
Floating rate bond that can be sold back periodically to the issuer.
Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate
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