Page 145 - The Informed Fed--Hearn (edited 10.29.20)

Assumed Interest Rate (AIR): The rate of interest an annuity provider
uses in determining the amount of each variable annuity income
payment. Also known as the benchmark rate or the hurdle rate.

Annuity purchase rate: The cost of an annuity based on insurance
company tables, which take into account various factors such as your age
and gender.

Commutable contract: An annuity contract that allows you to
terminate an annuity agreement that is paying you income on a fixed
period or fixed percentage basis.

Contract Value: The combined total of your principal and the port-folio
earnings in a variable annuity, up to and including the date on which you
annuitize. Also known as accumulate value.

Deferred annuity: An annuity contract that you purchase either with a
single premium or with periodic payments to help save for retirement.
With a Deferred Annuity, you can choose the point at which you convert
the accumulated principal and earning in your contract to a stream of
income.

Expense ratio: The amount, as a percentage of your total annuity
account value that you pay annually for operating, management, and
insurance expenses.

Fixed annuity: An annuity contract that guarantees you will earn a
stated rate of interest during the accumulation phase of a deferred
annuity, and that you will receive a fixed amount of income on a regular
schedule when you annuitize.

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