annuity

/an(y)uwatiy/ A right to receive fixed, periodic payments, either for life or for a term of years. Moore v. O'Cheskey, App., 87 N.M. 66, 529 P.2d 292, 293.

A fixed sum payable to a person at specified intervals for a specific period of time or for life. Payments represent a partial return of capital and a return (interest) on the capital investment. Therefore, an exclusion ratio must generally be used to compute the amount of nontaxable income.

Special rules apply to employee retirement plan annuities. The payment or receipt of a series of equal amounts of money per period for a specified amount of time. In an ordinary annuity, payments are made at the end of each period; in an annuity due, payments are made at the beginning

@ annuity bond

A bond without a maturity date, that is, perpetually paying interest

See also annuity.

@ annuity certain

Payable for specified period; no matter the time of death of the annuitant

See also annuity.

@ cash refund annuity

Policy which provides for the lump sum payment at the death of the annuitant of the difference between the total received and the price paid.

See also annuity.

@ contingent annuity

Funded annuity with payments to commence on the happening of an uncertain event; e.g. death of named person other than annuitant. An annuity whose number of payments depends upon the outcome of an event whose timing is uncertain at the time the annuity is set up.

See also annuity.

@ deferred annuity

Payments begin at some specified future date provided the beneficiary is alive at such date.

See also deferred annuity contract

See also annuity.

@ fixed annuity

Annuity that guarantees fixed payments, either for life or for a specified period, to annuitant.

See also annuity.

@ group annuity contract

A contract to make periodic payments to a member of a group covered by such contract. The usual type is a pension plan providing annuities upon retirement for individual employees under a master contract.

See also annuity.

@ joint and survivorship annuity

An annuity which is payable to the named annuitants during the period of their joint lives, with the annuity to continue to the survivor when the first annuitant dies.

See also annuity.

@ joint annuity

An annuity which is paid to the two named persons until the first one dies, at which time the annuity ceases.

See also annuity.

@ life annuity

Provides for payment of income to annuitant only during his lifetime; even though death is premature.

+ life annuity

An engagement to pay an income yearly during the life of some person; also the sum thus promised. An annuity, depending on the continuance of an assigned life or lives, is sometimes called a life annuity. Bodine v. Commissioner of Internal Revenue, C.C.A.3, 103 F.2d 982, 985.

See also annuity

@ private annuity

A contract for periodic payments to the annuitant from private as distinguished from public or life insurance company.

See also annuity.

@ refund annuity

Annuitant is assured a specified annual sum during his life, with the further assurance that in the event of his premature death there will be paid to his estate an additional amount which represents the difference between the purchase price and the amount paid out during annuitant's life.

See also annuity.

@ retirement annuity

Policy in which payments to annuitant commence at some future date; e.g. after retirement. If annuitant dies in interval or surrender is desired, an agreed upon amount is refunded to annuitant's estate.

+ retirement annuity

Type of pension plan paid through annuities to those who have retired. Plans differ as to the rights of survivors of the annuitant

See also annuity.

@ straight annuity

A contract usually by an insurance company to make periodic payments at monthly or yearly intervals; distinguishable from life insurance contract which looks to longevity, while annuity looks to transiency. Helvering v. LeGierse, 312 U.S. 531, 541, 61 S.Ct. 646, 85 L.Ed. 996.

Straight annuity contract calls for a fixed amount of payment as distinguished from the variable annuity.

See also annuity.

@ straight life annuity

See life annuity

- straight annuity.

See also annuity.

@ survivorship annuity

Type of annuity contract which provides for payments beyond the life of the annuitant, as for example, to a widow of the annuitant

See joint and survivorship annuity

See also annuity.

@ variable annuity

A contract calling for payments to the annuitant in varying amounts depending on the success of the investment policy of the insurance company; unlike a straight annuity which requires the payment of a fixed amount. Purpose of this type of annuity is to offset deflated value of dollar caused by inflation

+ variable annuity

An annuity whose periodic payments depend upon some uncertain outcome, such as stock market prices. An annuity contract in which the premiums or payments are invested in securities to keep pace with inflation. The payments, therefore, which the annuitant receives vary from time to time.

See also annuity

@ annuity policy

An insurance policy providing for monthly or periodic payments to insured to begin at fixed date and continue through insured's life. Hamilton v. Penn Mut. Life Ins. Co., 196 Miss. 345, 17 So.2d 278, 280

See also annuity.

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