Types of annuities
A mind map about types of annuities.
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Single premium immediate annuity : important example of an immediate
annuity. The annuity is purchased with a lump
sum, and the first payment starts one payment interval
from the date of purchase.
Sub Topic
The accumulation period:to retirement,
premiums are credited with interest. There are typically two interest rates:
The guaranteed
rate
The current rate
The liquidation period: (also called the payout period or annuitization period) follows the accumulation period and refers to the period in which the funds are being paid to the annuitant.

Single-premium deferred annuity.
Flexible-premium annuity.
Longevity annuity (longevity insurance).


Equity-indexed annuity

The key elements for evaluating an equity-indexed annuity are : 1-the participation rate 2- the maximumcap rate 3- the indexing method used 4- the guaranteed minimum value

The fundamental purpose :
of a variable annuity is to provide an inflation
hedge by maintaining the real purchasing power of
the periodic payments during retirement. It is based
on the assumption of a positive correlation between
the cost of living and common stock prices
Characteristics: 1-Premiumsare invested in a portfolio of common stocks or other
investments that presumably will increase in value
during a period of inflation. The premiums are used
to purchase accumulation units during the period
prior to retirement, and the value of each accumulation
unit varies depending on common stock prices. 2- At retirement, the accumulation units are converted
into annuity units. The number of annuity
units remains constant during the liquidation period,
but the value of each unit will change each month or
year depending on the level of common stock prices.