Page 146 - The Informed Fed--Hearn Wealth Management

Guaranteed Death Benefit: The assurance that your beneficiaries will
receive at least the amount you put into the annuity and typically your

locked-in earnings if you die before beginning to take income. This
guarantee is one of the insurance benefits that annuities provide.

Immediate annuity: An annuity contract that you buy with a lump sum
and begin to receive income from within a short period, always less than

13 months. An Immediate Annuity can be either fixed or variable.

Income options: The various methods of receiving annuity income that

an annuity contract offers. You may choose from among them the one
that suits your situation best. Typically, there are six or more choices,
many guaranteeing income for life.

Investment Portfolio: A collection of individual investments chosen by
a professional manger to produce a clearly defined investment objective.

Portfolios, which are structured the same way as open-end mutual funds,
are offered in a variable annuity contract and are available to people who

purchase the contract. They also are called sub accounts or investment
accounts.

Market Value Adjustment: This feature, which is included in some
annuity contracts; imposes an adjustment, or fee, if you surrender your

fixed annuity or the fixed account of your variable annuity. The
adjustment offsets any losses the insurance company might incur in
liquidating assets to pay the amount due to you.

Nonqualified annuity: An annuity contract you buy individually rather
than as part of an employer-sponsored qualified retirement plan. You

pay the premium with after-tax dollars. With a deferred nonqualified
annuity, your principal grows tax deferred.

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