Some annuities pay a first year bonus rate of interest or make a bonus percentage contribution on the initial premium investment. Contract A legally binding agreement between the parties. The interest rate that is currently being credited to the annuity contract value. Distributions Money taken out of the annuity contract. The beneficiary receives the greater of the principal or the value of the account as of the date of the annuitant's death.
Some variable annuities offer an enhanced death benefit.
Each contract offering this differs in it's provision. The proportion of an annuitized payment that is a return of capital and therefore not taxed. Expected Return The projected or assumed rate of growth. Equity indexed annuities have mortality, expense and margin fees. The guaranteed rate of interest for a specific period of time.