GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Substandard Health Annuity


Synonyms:bad health annuity
Filed Under: annuities, estate-management, investments
Tags: annuity, health, investment, life insurance
 

Definition of substandard health annuity

substandard health annuity
1. A type of straight life annuity arranged for individuals with medical conditions that decrease their life expectancy. Income payments are distributed at a faster pace than a normal annuity because of the annuitant's shorter lifespan. Because Substandard health annuities are a type of straight life annuity, income payments stop when the annuitant dies and no payments are made to beneficiaries.

Related Terms and Acronyms:

  • annuity   A financial instrument that disperses a number of payments over a set period of time.
  • annuity factor method   A way of determining the maximum amount an annuitant can withdraw from an annuity before penalties are applied.
  • cash refund annuity   An annuity that refunds any remaining balance to the beneficiaries or the annuitant's estate when the annuitant dies.
  • life annuity   An annuity that will continue to make payments until the death of the annuitant.
  • 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.
  • life insurance   An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
      ➥  CanEquity offers life insurance.
  • payout phase   The phase of a deferred annuity where the annuity begins to make payments to the annuitant.
  • straight life annuity   An annuity that stops all payments upon the annuitant's death.

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