Asset: A resource having economic value that an individual owns with the expectation that it will provide future benefit. Personal financial assets can be classified as cash, gold and savings.

Annuitant: A person who is entitled to receive benefits from an annuity.

Annuitize: To begin a series of payments from an annuity.

Beneficiary: A person designated to receive the income or other benefits from an insurance policy or annuity contract.

Compounding effect on earnings: The ability of your earnings to generate future earnings that are re-invested into your annuity for continual growth.

Death benefit: The amount stated in a policy contract as payable upon the death of the person whose life is being insured.

Deferred annuity: An annuity in which payments to the annuitant, or named beneficiary, are to begin either at a stated number years in the future or when the annuitant reaches a certain age. During the accumulation period, the cash values of the annuity accumulate on a tax-deferred basis.

Fixed annuity: An annuity that guarantees a set payment to be made in a lump sum or in periodic installments for life or for a specified term.

Hedge: An investment undertaken to offset the risk entailed by another investment.

General Account: All assets of an insurer other than assets held in separate accounts.

Guaranteed Fixed Rate:  A rate of interest guaranteed by the insurance company to the annuitant that will not drop below the guaranteed rate. The guarantee is backed by the claims-paying ability of the insurance company.

Inflation: A condition in which the overall prices of goods and services continue to rise. In the United States the rate of inflation is measured by the Consumer Price Index (CPI).

Inflation Risk:  The risk that the principal and income from investments will lose their purchasing power because inflation occurs faster than investment growth.

Immediate Annuity: Immediate annuities are single-premium contracts that begin paying installments immediately.

Principal: The original investment deposited into the annuity, not including earnings.

Probate: Judicial process that presents the estate of a deceased person to a court and an executor or administrator is appointed to carry out the administration of the estate.

Return on Investment: A measurement calculated to evaluate the financial return on a particular investment during a specified period of time.

Securities: An instrument representing ownership (stocks), a debt agreement (bonds), or the rights to ownership (derivatives). Variable annuities invest in securities.

Variable Annuity: A tax-deferred retirement planning and payout option offered only through a life insurance or annuity company.

Volatility: The tendency of a security market to change in price.