Apportionment: The dividing of a distribution or allotment a loss proportionately with usually insurers with two or more claims that cover the same loss.

Factoring Discount: The factoring discount is the difference between the total undiscounted amount of structured settlement payments being acquired and the total amount paid by the acquirer. Means an amount equal to the excess of the aggregate undiscounted amount of structured settlement payments being acquired in the structured settlement factoring transaction, over the total amount actually paid by the acquirer to the person from whom such structured settlement payments are acquired.

Annual Contract Fee: The fee is usually waived for contracts with high account amounts. This is an annual fee, usually in the low range, paid to the insurance company for administering the contract.

Basis Points: The fees in your annuity also can represent a percentage of your investment.

Prospectus: The financial details of a variable annuity are prepared in a legal document as well as the risks are listed, this document is usually called a prospectus. The Government SEC mandates a requirement that this legal document be presented to consumers before purchasing an annuity.

Structured Settlement: A structured settlement is usually a way of paying the injured party in a lawsuit. Instead of paying all the money the court judge decides up front, the injured party gets periodic payments over time to fulfill the court ordered settlement. Sometimes the structured settlement is started after an initial lump sum is paid then the remainder or the arranged settlement from the court is put in to a long payment policy. This is normally a type of secure annuity. Annuity payments every month or periodic payments are then sent to the injured and over usually long periods of time the settlement is paid in full. The laws have been adjusted so that the structured settlement receiver can get lump sum money amounts from the annuity in lieu of a set of planned payments or the entire remainder of the structured settlement can be paid in a lump sum. This has to be done with a settlement purchaser company and the courts and judge must see the request and approve it at the judge level. The lump some is always less then the real amount if the injured would have waited. The settlement owner pursuing a lump sum must show a reasonable and responsible need for the funds. The judge will determine if a lump sum will be permitted to the settlement owner.

Cash value: The funds available in cash upon surrender of a permanent life insurance policy. This is also called cash surrender value.

Tax Deferral: The funds that accumulate in your annuity that grows tax-deferred, you do not pay taxes on it until you begin receiving annuity payments.

Income Variable Fund: The goal of this type of fund is to invest in companies or asset groups that the investing manager thinks will deliver a steady amount of income to the fund, often through dividends. This fund is sometimes mentioned as an equity income variable fund.

Free withdrawal: The maximum withdrawal is normally up to ten and half percent of the annuity value. A condition in many deferred annuities that allows for early withdrawal without an insurance company regulated fine. Taxation penalties can apply if you withdraw funds before reaching age fifty nine and half.

Secondary Payee: The party designated to get any guaranteed payments from an annuity after the death of the measuring life.

Lump Sum Payment: A lump sum is many times offered instead of payments over time, the both are offered and the person receiving must make a choice. The funds or money of a lump sum settlement offer is always much lower than if periodic payments were made over time. Inflation and present value of money is often a reason to take a lump sum from a settlement or early payments being purchased from an annuity. Lump sums can also be payments from an annuity contract, on a specific date in the future, usually built into a plan to deal with foreseeable requirements such as education, vehicle or other.