GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Split-Funded Annuity


Synonyms:annuity ladder
Filed Under: annuities, estate-management, financial-banking, investments
Tags: annuity, banking, investment, life insurance
 

Definition of split-funded annuity

split-funded annuity
1. A grouping of two separate annuities, one an immediate payout annuity and the other a deferred annuity; a portion of the principal is immediately paid back to the annuitant in the form of regular income payments, while another portion is set aside and invested for future repayment.

Related Terms and Acronyms:

  • accumulation period (AP)   The period where an investor continues to put money into his or her investment(s).
  • annuity   A financial instrument that disperses a number of payments over a set period of time.
  • annuity ladder   A financial plan to purchase multiple annuities from different companies over a number of years in order to minimize interest rate risk and the risk of a total loss.
  • hybrid annuity   An annuity with both fixed and variable annuity elements.
  • immediate payment annuity   An annuity where payments to the annuitant start immediately after the annuity has been set up.
  • laddering   Staggering deposits into investments such as CDs in order to vary and better the rate of return.
  • life expectancy method   A method of calculating the appropriate size of payments in an annuity's income phase by estimating the annuitant's life expectancy.
  • maturity guarantee   A guarantee that after a certain date a contract, such as a life insurance policy or annuity, will have a minimum dollar value.
  • payout phase   The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
  • wraparound annuity   An annuity that allows the annuitant to control how funds in the annuity are invested.

More Related Terms and Acronyms

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