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| Glossary |
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| 100% Joint & Survivor |
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Payment option in which payments are contingent on the lives of two people (annuitants), usually a husband and wife. Payments are made for the Annuitant's lifetime with full payments continuing for the lifetime of the surviving Annuitant. |
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| 1035 Exchange |
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Under Section 1035 of the Internal Revenue Code, certain insurance and annuity contracts may be exchanged for new contracts with no gain or loss recognized on the exchange. Internal Revenue Service tax rules must be followed to achieve the desired result. |
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| Annuitant |
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Person whose life is the basis for Life Contingent payments (Also referred to as Measuring Life in our Contract). The Annuitant may not be changed after the Contract Date. Unless otherwise stated, the Annuitant shall also be the Owner and the Payee. |
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| BRK Direct |
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Berkshire Hathaway Group of Insurance Companies. |
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| Certain & Life |
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Payment option in which payments continue until the death of the Annuitant, but at least for a minimum period (the "Certain Payments" period). |
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| Certain Only |
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Payment option in which payments are made for a fixed period of time and the payments are not Life Contingent. |
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| Certain Payments |
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The minimum number of payments that will be made, even if no annuitant remains alive. |
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| Contingent Owner |
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the estate of the Owner. |
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| Exclusion Ratio |
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Percentage of each Periodic Payment which is non-taxable for federal income tax purposes when a SPIA is bought with non-qualified after-tax dollars. The Exclusion Ratio represents the return of one's investment over the life of the Contract and will vary depending upon the age of the Annuitant and the payment option. State income taxes vary widely and exclusions for state income tax purposes may not be applicable. Please consult your tax advisor. |
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| First Payment Date |
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The date on which the first payment is made. Payments will be made regularly thereafter according to the selected Periodicity. |
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| Guaranteed Minimum Payment |
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An option available to the Owner which guarantees that payments will continue at least until they equal, in the aggregate, the net investment. In states with a premium tax on annuities, the net investment equals the premium, less any state premium tax. Most states do not impose a premium tax on annuities. |
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| Life Contingent Payments |
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Payments that continue to be made as long as the Annuitant is alive. |
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| Life Only |
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Payment option in which payments are made only as long as the Annuitant is alive. |
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| Owner |
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The Owner owns the Annuity. The Owner will have the right to designate or change the Payee to whom the benefits are payable under the annuity. |
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| Payee |
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Person(s) or entity to whom payments are made under this contract. If two or more Payees are designated and their respective interests are not specified:
- their interests will be several and equal and;
- in the event of the death of a Payee, any
payments due shall be divided equally among the surviving Payees.
Multiple Payees may not be designated if the designation would
result in any Payee receiving less than $1,000 per
payment.
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| Periodic Payments |
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Payments made by BRK Direct on a periodic basis in exchange for the Single Premium Investment. |
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| Periodicity |
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The time interval between Periodic Payments (monthly, quarterly, semi-annually or annually). |
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| Qualified Retirement Plan |
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A retirement plan that receives favorable tax treatment under Sections 401, 403, 408 or 457 of the Internal Revenue Code. |
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| Single Premium Deferred Annuity |
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This product allows one to accumulate wealth on a tax-deferred basis. See the SPDA product on our Web-site. |
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| Single Premium Investment |
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A product that does not require further investment by the purchaser after the premium is paid. |
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| Tax Qualified Plan |
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A retirement plan that allows an employee to make pre-tax contributions to an annuity. Examples include Pension Plan, Profit Sharing Plan, 401 (k) Plan, Tax-Deferred Annuities and IRAs. |
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| Thirty-year U.S. Treasury Bond Rate |
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"Benchmark 30-year" U.S. Treasury Bond rate as printed in the Wall Street Journal or similar publication. |
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| U.S. Treasury Strip Rate(s) |
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U.S. Treasury Coupon Interest (ci) Strips will be used to price your SPIA. These rates are shown in the Wall Street Journal or similar publication. These rates will be capped at the Thirty-year U.S. Treasury Bond Rate. |
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