The world of annuities is colorful and bright, but quite large at the same time too! There are a number of facts, laws, concepts, requisites, definitions, terms, conditions and information that constantly keep changing and updating. To be abreast with all is next to impossible if you are a simple investor. In fact, you should leave such awareness levels with the experts. However, since your money is involved you should be optimally aware so that you do not stand to loose. The first step in the world of annuities can be a realistic visit to an annuity glossary. While the need of a glossary shall remain through out your investment period, you can always come back to them. Most insurance companies of today have come up with detailed glossaries to aid you. You can also fine some online. It is always wise and clever to visit these and clear your concepts before investing.

An annuity is the payment of a regular income by a life company to an annuitant in exchange for a lump sum either for life or shorter periods. This is a basic definition of annuity. Here is a mini-glossary for terms frequently used in the annuity world.

There are three main types of annuities, commonly referred to as fixed annuities, variable annuities or equity indexed unit-linked annuities. Some key terms are touched upon below.

Mini Glossary for Annuities:

Fixed annuities: The rate of interest and amount to be received is fixed and guaranteed at the time of contract.

Variable annuities: Rate of interest is variable and dependent of stocks or performance of economy. Returns are higher in this type and so are the risks.

Equity indexed unit-linked annuities: Is a combination of variable and fixed annuities, where a part of your investment is linked to stocks and bonds and another part is kept fixed.

Annuity certain: Steady income is paid to you for a given period, irrespective of whether or not death of the individual occurs. In case of death the balance is paid to nominee.

Deferred annuity: Your income does not commence until some future specified date.

Escalating annuity: Income increases annually by a given amount, for example 2.5%.

Immediate annuity: An annuity which starts to pay income to you soon after it has come into operation, earliest within 30 days.

Joint life annuity: Income usually received by to either of two people, which continues until the death of the first person.

Joint life and survivor annuity: Income received by two people (for example man and wife) and continues until the death of the second person (both persons).

Temporary annuity: Income is paid either for a fixed period or until earlier death.

To learn more with annuity glossary or to visit an extended glossary, visit us at AnnuityLibrary.com. For expert advice, submit your queries here or call us toll-free at 1-800-998-4056.