Exclusion Ratio

AAA

DEFINITION of 'Exclusion Ratio'

The portion of the return on investments that is income tax exempt. It represents a payback of initial investments rather than capital gains.

INVESTOPEDIA EXPLAINS 'Exclusion Ratio'

The exclusion ratio arises mainly through different forms of non-qualified insurance annuities.

RELATED TERMS
  1. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  2. Annuity

    A financial product sold by financial institutions that is designed ...
  3. Exempt Income

    Certain types or amounts of income not subject to federal income ...
  4. Income Tax

    A tax that governments impose on financial income generated by ...
  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  6. Subaccount Charge

    Fees charged for the management of an investment fund.
Related Articles
  1. Retirement

    Immediate Annuities: More Income and Lower Taxes

    These instruments may shed their bad rap to bring you a hefty tax break.
  2. Fundamental Analysis

    Ratio Analysis Tutorial

    If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios.
  3. Taxes

    Avoiding A Big Tax Bill On Real Estate Gains

    Installment sales allow sellers to defer taxes on real estate profits.
  4. Retirement

    What can I do if I bought an annuity and don't want it anymore?

    Consider possible repercussions of cashing in your annuity policy. Depending on the circumstances, this could cost you. There may be a better option available.
  5. Retirement

    Are there penalties for withdrawing monies invested in annuities?

    Learn about the penalties associated with taking early withdrawals from an annuity. Steep penalties are assessed by the insurer and sometimes by the IRS.
  6. Retirement

    What is an equity-indexed annuity?

    Understand what an equity-indexed annuity is, its advantages and disadvantages, and how it differs from other annuity investments.
  7. Retirement

    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 after your death.
  8. Insurance

    Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ratings by Weis.
  9. The Treasury and the IRS have issued new guidance on pairing annuities with target date funds.
    Investing Basics

    Guidance On Pairing Annuities, Target Date Funds

    The Treasury and the IRS have issued new guidance on pairing annuities with target date funds. Here's a look.
  10. How can investors close to retirement protect the purchasing power of their savings? Here are some tips for near-retirees and their financial advisors.
    Investing News

    Tips To Beat Inflation For Near-Retireees

    How can investors close to retirement protect the purchasing power of their savings? Here are some tips for near-retirees and their financial advisors.

You May Also Like

Hot Definitions
  1. Marketable Security

    Any equity or debt instrument that it readily salable and can be converted into cash, or exchanged with ease. Stocks, bonds, ...
  2. Risk-Free Rate Of Return

    The theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would ...
  3. Scarcity

    The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, ...
  4. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The ...
  5. Christmas Tree

    An options trading strategy that is generally achieved by purchasing one call option and selling two other call options at ...
  6. Christmas Club

    A short-term savings account that usually pays out the full account balance to its account holders once each year, right ...
Trading Center