Split-Funded Annuity

Split-Funded Annuity

A type of annuity that uses a portion of the principal to fund immediate monthly payments and then saves the remaining portion to fund a deferred annuity. The two funding methods let the annuity holder receive dependable income and simultaneously save for future needs. Using a split-funded annuity means that individuals do not have to wait for the annuity to reach the payout phase, because the stream of income begins immediately. At the same time, the annuity's remaining balance compounds tax deferred.

Inflation-Protected Annuity - IPA

Inflation-Protected Annuity - IPA

An annuity investment that guarantees a real rate of return at or above inflation. The real rate of return is the nominal return, less the inflation rate, thus protecting annuitants and beneficiary investors from inflation. Inflation-protected annuities are becoming more popular with annuity investors who are worried about the risk of inflation decreasing the purchasing power of their money as they age.