Through security investments, the objective is to preserve the annuity's value that is otherwise subject to inflationary erosion. The return to investors, usually at retirement, may be periodic payments that change with the market value of the portfolio or fixed minimum payments based on portfolio appreciation. It affords policyholders a chance to earn capital gains on their insurance by investing the cash value of the policy in stock, bond, or money market portfolios. The policyholder sustains the investment risk and the insurance company guarantees a minimum death benefit that is not affected by any portfolio losses. As in IRAs, earnings from variable life policies grow tax deferred until distributed.
Income is taxed only for the amount that exceeds the total premiums paid into the policy.
The note's rate is adjusted downward or upward every time the base rate changes. Note appearing on the consolidated tape indicating that for transactions of less than 5000 shares only the stock symbol and the trading price will be displayed. This usually occurs when the tape is running behind because of heavy trading. The amount of times a dollar is spent in a specific time period. Velocity affects economic activity produced by a given money supply, which includes bank deposits and cash in circulation.