CPCU 556 ch 12

  1. General annuity rule
    A tax provision that states that the taxable part of annuity or installment payment is determined by excluding the part of the payment that is attributable to the employee's own net investment in the plan if any
  2. Modified simplified general rule
    the nontaxable portion of each annuity payment is determined by dividing the annuitant's investment in the contract by a factor from federal tables that is based only on a single annuitant's age or on annuitants combined ages if the annuity is payable over two or more lives
  3. Lump sum distribution
    the distribution or payment within a single tax year, of a participants entire qualified retirement plan account balance
  4. Net unrealized appreciation (NUA)
    an item that may be subtracted from the total distribution when determining the taxable amount of a lump sum distribution; the difference between the fair market value of the securities at distribution and their cost or another basis to the plan
  5. Designated beneficiary
    individual designated by a qualified retirement plan participant or owner to receive any remaining plan benefits after the participant dies
  6. Life expectancy distribution option
    A qualified retirement plan beneficiary option requiring minimum annual distributions over a beneficiary's life expectancy
  7. Five year rule
    the risk of loss of capital that occurs when a retired employee or spouse who is the owner of the annuity dies
  8. Annuity form
    Annuity contract selected by the owner may be single life annuity, qualified joint and survivor annuity, other joint life and last survivor annuity forms
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CPCU 556 ch 12
CPCU 556 ch 12