DEFINITION of 'Assumed Interest Rate  AIR'
The rate of interest, or growth rate, selected by an insurance company. The assumed interest rate is provided to determine the value of an annuity contract and, therefore, the periodic income payment which can be provided to the annuitant. Combined with other factors such as the annuitant's age upon annuitization, spousal coverage options and the type of annuity coverage chosen, the AIR determines the monthly payment the annuitant will receive.
BREAKING DOWN 'Assumed Interest Rate  AIR'
In other words, the AIR is the minimum interest rate that must be earned on investments in the policyholder's cashvalue account in order to cover the insurance company's costs and expected profit margin. A larger AIR will result in a more robust prediction for market returns for the insurance company as well as a greater monthly income payment for the annuitant.

Guaranteed Minimum Income Benefit ...
A type of option that annuitants can purchase for their retirement ... 
Contingent Annuitant
Someone designated by an annuitant to receive the annuitantâ€™s ... 
Annuitization
The process of converting an annuity investment into a series ... 
Joint Life With Last Survivor Annuity
An insurance product that, when annuitized, makes payments to ... 
Annuitization Method
A type of annuity distribution structure that gives the annuitant ... 
Payout Phase
The phase in an annuity during which payments are made to the ...

Retirement
Introduction To Annuities: Basics of Annuities
In the introduction, we learned about the history and purpose of annuities. In this section, we will explore the mechanics of these contracts and the basic characteristics that apply to all forms ... 
Bonds & Fixed Income
Explaining Types Of Fixed Annuities
Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income. 
Annuities
What annuities are: Insurance products that provide a source of monthly, quarterly, annual or lump sum income during retirement. Pros: Taxdeferred growth of earnings; no annual contribution ... 
Retirement
Analyzing The Best Retirement Plans And Investment Options: Annuities
What they are: Insurance products that provide a source of monthly, quarterly, annual or lump sum income during retirement. Pros: Taxdeferred growth of earnings; no annual contribution limit; ... 
Retirement
Is Annuitization Your Best Strategy?
Annuitization has traditionally offered annuity owners a stream of income they cannot outlive, but there are some disadvantages to this form of payout. Consider alternatives, such as incomebenefit ... 
Professionals
Types of Annuity Payouts
FINRA/NASAA Series 26 Section 3  Types of Annuity Payouts. This section describes several annuity payout options: life annuity, life annuity with period certain, joint life with last survivor ... 
Professionals
Types of Annuity Payouts
FINRA Series 6: Section 11 Types of Annuity Payouts. In this section Payout Phase, Life Annuity, Life Annuity with Period Certain, Joint Life with last survivor, life contingency. 
Products and Investments
An Annuity Lowdown for Investors and Advisors
Knowing how annuities work starts with an explanation of what each part is. Here is a list of terms that cover the basic aspects of annuities. 
Professionals
Sub Accounts
Sub Accounts 
Professionals
Annuities
Annuities

What happens to my annuity after I die?
Understand the different types of annuity payment plans and what payments or additional benefits are payable to your beneficiaries ... Read Answer >> 
How are variable annuities taxed at death?
Find out how variable annuities are taxed after the death of an annuitant, including an explanation of the various payment ... Read Answer >> 
What are the main kinds of annuities?
Learn about the four basic types of annuities, and why the different investment and payout options are suitable for different ... Read Answer >> 
In the separate account of a variable annuity, which of the following characteristics ...
The correct answer is b. When the holder of a variable annuity contract annuitizes the contract, he/she is asking that the ... Read Answer >> 
What is the difference between a fixed and variable annuity?
Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ... Read Answer >> 
For what types of financial instruments would I want to calculate the present value ...
Learn about the types of financial instruments the present value of an annuity calculation is most useful for, including ... Read Answer >>