Hi folks, J.G. Wentworth here continuing our series on important keywords and terms we believe our customers need to know. While our previous blog focused on terms associated with structured settlements, todays will deal exclusively with annuities. So if you are currently receiving regular payments from an annuity, and are considering selling these payments for cash now, here are some commonly-used terms and their definitions.
Annuitant – The individual on whose life the annuity is based, and generally the person receiving or entitled to the annuity payments.
Annuity – A tax-deferred contract that can provide an income for a specified time period, such as a number of years or for the life of the individual.
Annuity Benefits – The guaranteed periodic payments that will be paid to the owner during the payout period.
Annuity Contract – The agreement between the customer and the insurance company that stipulates the features of the annuity and the responsibilities of each party.
Annuity Issuer – The insurance company that issues the annuity.
Annuity Owner – The person or people who make decisions about an annuity. The owner or owners have the rights to make withdrawals, surrender or change the designated beneficiary or other terms of the contract.
Annuity Payment Period – The period of time that the annuity payments are designated to last.
Annuity Start Date – The date designated for annuity payments to begin.
Discounted Present Value – The net present value of future payments, this is determined by discounting the future payments to the present.
Fixed Annuity – An annuity in which the insurance company pays the contract holder a fixed periodic payment amount.
Full Purchase – A transaction in which the customer sells their entire annuity payment stream.
Guaranteed Payments – Payments made regardless of whether the annuitant is living or deceased.
Lifetime Payments – An annuity income option that makes monthly payments of equal amounts for the remainder of the annuitant’s life, regardless of the length of time.
Lump Sum Annuity – An annuity designed to make a single payment on a specified future date or a series of lump sum payments on specified future dates.
Lump Sum Payment – A sum of money paid in a single installment.
Partial Purchase – When a customer sells only a portion of their annuity payment stream.
Payment Stream – Payments received periodically from an annuity.
Stream of Payments – Payments received periodically from an annuity.
Term of Policy – Period for which the policy runs. For term insurance, this is the length of time the death-benefit protection is available.
Quote – A stated price for assets or services.
Please know that we have an even more detailed list of terms on our website, which can be found here. And if you have any questions about your own annuity, and whether you qualify to sell your future payments for cash, please contact J.G. Wentworth anytime at 877-227-4713.