Annuity Contract

What Does Annuity Contract Mean?
The written agreement between an insurance company and a customer outlining each party's obligations in an annuity coverage agreement. This document will include the specific details of the contract, such as the structure of the annuity (variable or fixed), any penalties for early withdrawal, spousal provisions such as a survivor clause and rate of spousal coverage, and more.

Investopedia explains Annuity Contract
An annuity contract is one of the three accounts that can exist under a 403(b) plan. These 403(b) annuity contract plans are also known as "tax-sheltered annuities" or "tax-deferred annuities". An annuity contract is beneficial to the individual investor in the sense that it legally binds the insurance company to provide a guaranteed periodic payment to the annuitant once the annuitant reaches retirement and requests commencement of payments. Essentially, it guarantees risk-free retirement income.

Related Terms

403(b) Plan
Annuitant
Annuity
Deferred Annuity
Fixed Annuity
Perpetuity
Segregated Fund
Stretch Annuity
Variable Annuity
More Related Terms

Related Links

An Overview Of Annuities - These contracts provide a guaranteed income stream. Learn how they work and their benefits.
Exploring Types Of Fixed Annuities - Understand what you're getting when buying these. Here we look at differences, advantages and disadvantages.
Find High Yield CDs - Retire in style. Search for the 100 highest yielding CD's from Bankrate.com. Click Here!
Getting the Whole Story on Variable Annuities - Variable annuities are another way to save money tax-deferred - but don't jump in blindly!
403(b) Plan Tutorial - Learn about the set-up, the contributions to and the distributions from this retirement plan for certain employees of public schools and tax-exempt organizations.

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