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Hybrid annuity |
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Hybrid annuityA type of insurance company investment that combines the benefits of both a fixed annuity and a variable annuity.Hybrid annuity Similar MatchesAnnuity factorAnnuity factorPresent value of $1 paid for each of t periods. Increasing life annuityIncreasing life annuityAnother expression for escalating annuity. Purchased life annuityPurchased life annuitySee 'annuity'. Deferred nominal life AnnuityDeferred nominal life AnnuityA monthly fixed-dollar payment beginning at retirement age. It is nominal because the payment is fixed in a dollar amount at any particular time, up to and including retirement. AnnuityAnnuityThe payment of a regular income by a life company to an annuitant in exchange for a lump sum either for life or shorter periods.Annuities are typically used for pensions and the individual receiving the annuity is known as an annuitant. In the UK they can broadly be classified into two types:A Compulsory purchase annuity which is bought from the proceeds of a pension fund and is taxable as earned incomeA purchased life annuity which is bought with an individual's own capital and is taxed at a lower rate than a compulsory purchase annuity.There are three different types of pension annuities, commonly referred to as standard annuities, with-profits annuities and unit-linked annuities.Standard pension annuities are the most commonly purchased and account for over ninety percent of the UK market. The income from a standard pension annuity is guaranteed for the rest of the annuitant's life whereas the income from a with-profits or unit-linked annuity will fluctuate depending on the investment performance of the underlying assets. There are various options which can be provided including:Annuity certain: Income is paid for a given period whether or not death of the individual occursDeferred annuity: Income which does not commence until some future specified dateEscalating annuity: Income which increases annually by a given amount, for example 3%. The choosing of this option results in lower income compared with a level annuity over the initial yearsImmediate annuity: An annuity which starts to pay income soon after it has come into operation, for example at the end of the month following the payment of the lump sumJoint life annuity: Income usually relevant to two people (for example man and wife) which continues until the death of the first person onlyJoint life and survivor annuity: Income usually relevant to two people (for example man and wife) which continues until the death of the second personLevel annuity: Income which is paid at a fixed rate throughout the life of the individual. See also guaranteed minimum periodTemporary annuity: Income is paid either for a fixed period or until earlier death. Further SuggestionsAnnuity duequalifying annuity Normal annuity form annuity starting date annuity deferral variable annuity retirement annuity contract (RAC) Period certain annuity Equivalent annual annuity Annuity certain Joint and survivor annuity escalating annuity Reverse annuity mortgages (RAM) fixed annuity joint life annuity Deferred payment annuity Qualifying annuity reverse annuity mortgage temporary annuity Life annuity Single life annuity Wraparound annuity Tax sheltered annuity Annuity starting date Annuity in arrears |
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