cpcu 556 ch 11

  1. Individual retirement account (ira)
    IRS account that allows an individual to make limited contributions that qualify as deductions against income earned in that year;interest accumulates tax deferred until the funds are withdrawn
  2. Individual retirement annuity (IRA)
    A flexible premium annuity contract that may be designed as a fixed dollar annuity or a variable annuity
  3. regular (earnings related) traditional IRA's
    Individuals make tax deductible contributions based on their earnings, marital status, and whether or not they are covered under certain employer provided retirment plans
  4. Required begining Date (RBD)
    Date an owner of a traditional IRA must begin taking taxable distributions no later than april 1 of the calendar year following the year in which the owner is 70 1/2
  5. Rollover traditional IRA
    A traditional IRA that receives an eligible rollover distributions from a qualified retirement plan, TSA, or Section 457 government deffered compensation plan
  6. Roth IRA (earnings related)
    Individuals make contributions that are taxed currently and that are based on their earnings and marital status. There are income limits; there is no required beginning date for distributions; qualified distributions are usually nontaxable
  7. Spousal IRA
    When one of the spouses has no compensation during the tax year, the working spouse may contribute to an IRA for the nonworking spouse as well as to his or her own IRA
  8. Education savings account (educational IRA)
    An individual can contribute up to $2000 per year beneficiary to an education savings account, subject to certain income limits
  9. Ira to Ira rollover
    A transfer of all or part of assets received from one IRA into another IRA of the same type within 60 days to avoid current income tax
  10. Direct IRA transfer
    Distribution where an IRA's assets are transferred directly from one plan to another without passing into the hands of the IRA owner
  11. Self directed IRA's
    An IRA where the owner has complete control over the selection of a broad range of investments
  12. Life annuity
    A annuity where an individual pays an insurance company a specific sum in exchange for a promise that the insurer will make a series of periodic payments to the individual for as long as he or she lives
  13. Annuity consideration or premium
    specified sum that an individual pays an insurance company in exchange for the promise of guaranteed annuity payments
  14. Annuitant
    the individual who is to receive guaranteed payments for as long as they lives
  15. Fixed dollar annuity
    annuity where cash value acumulation is a stated dollar amount that is guaranteed by the insurance company and on which the insurer pays a specified or determinable rate of interest
  16. Variable annuity
    Annuity where the owner can choose from a number of investment funds to place their annuity premiums with the option of moving their annuity contributions and the cash values among the various funds at reasonable intervals
  17. Annuity units
    Current value of the retirement variable annuity investment fund, converted into units of retirement income; the annuitant receives an income of a certain number of calculated "annuity units" per months
  18. Combination plans
    Annuities that give owners the choice of putting their annuity values into a fixed dollar fund, 1 or more variable funds, or a combination of fixed and variable accounts
  19. Equity indexed annuity (EIA)
    Fixed dollar annuity that combines minimum insurance company guarantees and the linking of interest earnings of the cash value to a stock market index
  20. Flexible premium annuity
    An annuity that allows the owner the discretion of when to pay periodic premiums
  21. Single premium annuity
    An annuity that is purchased with a single lump sum payment
  22. Deferred annuity
    An annuity where the benefits will not be payable until some years in the future
  23. Immediate annuity
    An annuity in which the benefits begin as soon as the purchase price is paid
  24. Annuity owner
    The person or entity who owns the right under an annuity contract
  25. Beneficiary
    The person or entity named in the contractto receive the death benefit under the annuity if that the owner dies before the benefits are paid
  26. Accumulate phase
    The time period in which contributions are made to the annuity contract, thus accumulating capital
  27. Distribution phase
    The time period in which the owner receives benefits or payouts from an annuity
  28. Yield guarantee
    The interest rate that an insurance company will pay on the cas accumulation under a fixed dollar annuity
  29. Front end load annuity
    An annuity that has a sales charge deducted from its premium at the time the contract is purchased
  30. Surrender charge
    fee assessed against the annuity contract if more than a certain amount is withdrawn or surrendered within a specified time period after purchase
  31. Back end load
    A contingent deferred sales charge that is normally a diminishing percentage of the annuity value and tends to discourage annuity owners from transferring or surrendering their annuities during the period in which the loads may be imposed
  32. Split funded annuity
    A combination of an immediate annuity and a deferred annuity where part of the annuity fund is used to provide an immediate income for a fixed period or for life, while the remainder continues to grow tax deferred as a deferred annuity
Card Set
cpcu 556 ch 11
cpcu 556 ch 11