Annuity
Glossary
To help you understand Life Insurance, we have provided you with a
general explanation of some frequently used terms. Note that the exact
definitions of these terms can vary from company to company. Always
consult your agent for the meaning of the terms applicable to your
policy.
Accumulation Unit:
Money paid in or transferred into an investment division of the Separate
Account is credited in the form of accumulation units. Any increase
or decrease in value is based upon the investment performance of the
underlying investment portfolio.
Asset Allocation:
A financial strategy for investing money into various asset classes
— such as stocks, bonds and cash — based upon your financial
goals, risk tolerance and time horizon. Asset allocation has two main
advantages: it can help increase investment returns and reduce risk.
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Beneficiary:
The person(s) who receive(s) money upon the death of the annuity's
contract owner or annuitant. The contract owner decides who the beneficiary
will be.
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Death Benefit:
The guarantee that if you should die before you convert your Multi-Strategy Indexed
annuity into regular income payments (annuitize your contract), your
annuity's beneficiaries will receive the higher of the account value
or a different amount specified in the annuity (such as the amount
you contributed to the annuity, less withdrawals). In many Multi-Strategy Indexed
annuities, the death benefit can increase over time.
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Deferred Annuity:
A type of personal retirement account that provides tax-deferred growth
potential for long-term goals, such as retirement. When you are ready
to receive income payments, the deferred annuity provides many choices,
including guaranteed income for life. There are two types of deferred
annuities: fixed and Multi-Strategy Indexed.
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Flexible Premium Annuity:
An annuity that accepts periodic contributions, which can usually
be made at any time (as opposed to single premium).
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Income for a Guaranteed Time Period Annuity: An annuity income
option that guarantees payments for a specific time period, usually
from 5 to 30 years. If the annuitant dies before all payments have
been made, then the owner (or beneficiary if the owner is deceased)
will receive the balance of payments for the rest of the guaranteed
period. You may be able to choose fixed or Multi-Strategy Indexed payments, depending
on the annuity.
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Income for Life Annuity:
An annuity income option that guarantees income for the life of the
annuitant, no matter how long he/she lives. The amount of the payment
depends on your account value and the life expectancy of the annuitant.
The payment amounts may be fixed or Multi-Strategy Indexed, depending on the annuity.
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Income for Life with a Guaranteed Time Period Annuity:
An annuity income option that guarantees payments for the annuitant's
life, with a guaranteed number of years. If the annuitant dies during
the guaranteed period, payments will continue to the annuity's owner
(or beneficiary if the owner is deceased), for the remainder of the
period. Many annuities also offer this option for the lives of two
annuitants. You may be able to choose fixed or Multi-Strategy Indexed payments,
depending on the annuity.
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Individual Retirement Account/Annuity (IRA):
A tax-deferred retirement account for individuals that allows a contribution
of 100% of earned income up to a maximum of $2,000 per year. (A contribution
of up to $2,000 may also be made on behalf of a spouse.) With a Traditional
IRA, some or all of the contribution may be tax deductible, depending
on the individual's income level and coverage by qualified retirement
plans. With a Roth IRA, the contribution is not tax deductible, but
all earnings are tax free, provided certain conditions are met.
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Minimum Distribution Service:
Federal tax law and regulations generally require that you begin taking
minimum distributions from your Traditional IRAs, SEPs and SIMPLEs
by April 1st of the calendar year following the year in which you
reach age 70_. Some companies, including MetLife, offer a Minimum
Distribution Service that calculates the minimum withdrawal required
by Federal tax law for your IRA.
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Savings and Investing Phase:
Time period during a deferred Multi-Strategy Indexed annuity contract when money
is invested and/or left to grow on a tax deferred basis. Also known
as the Accumulation Phase.
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Systematic Withdrawal Program:
A program that allows for periodic payments from an annuity, for
example on a monthly, quarterly, semiannual or annual basis. In a
Multi-Strategy Indexed deferred annuity, you can generally make systematic withdrawals
from your contract while keeping the rest of your money invested in
the funding options.
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Multi-Strategy Indexed Immediate Annuity:
An income annuity that begins providing income payments right away,
or soon after purchase. The amount of the payments is based upon the
performance of investment choices that you select.
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Yield:
The rate of return on an investment, generally expressed as a percentage
of the current price.
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