Defined terms for the annuity market and lifetime income landscape.
A premium bonus is an amount credited by the carrier to a deferred annuity contract at issue or on additional premium contributions, expressed as a percentage of the premium and added to the accumulation value, funded structurally through some combination of declared-rate adjustment, surrender-charge schedule extension, and embedded spread. Why it matters A premium bonus increases the accumulation value at issue above the premium paid, which makes the contract's headline starting
A qualified annuity is an annuity contract held inside a tax-qualified retirement account — such as an IRA, 401(k), 403(b), or 457(b) plan — in which premium contributions were generally made on a pre-tax basis and every dollar of distribution is taxed as ordinary income. Why it matters The qualified/non-qualified distinction is the master tax variable for annuity contracts: it determines whether premium contributions were pre-tax or after-tax, whether the contract has cost basis
