Hybrid annuity

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Hybrid annuity

A type of insurance company investment that combines the benefits of both a fixed annuity and a variable annuity.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Hybrid Annuity

An annuity that allows the annuitant to make contributions to both a fixed annuity and a variable annuity at once. For example, if an annuitant contributes $1000 per month to the hybrid annuity, $800 may be allocated to the fixed annuity and $200 to the variable annuity. This provides the holder of the hybrid annuity the stability of a fixed annuity with the potential for a higher return that a variable annuity brings. A hybrid annuity is most useful for retirees who expect to live for a long time and wish to participate in the stock market.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

hybrid annuity

A single annuity in which a part of an investor's payments purchase units of a variable annuity and the remaining funds purchase units of a fixed annuity.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Hybrid annuity.

With a hybrid annuity, you allocate part of your annuity's assets to providing fixed income payments and part to making variable income payments.

For example, you could buy a hybrid immediate annuity with a lump sum of $50,000, and allocate $35,000 to fixed payments and $15,000 to variable payments.

The fixed portion would lock in a specific yearly income, while income from the variable portion would depend on the performance of the underlying investments you selected.

This approach allows you to combine the advantages of both types of annuities -- regular income from the fixed and growth potential from the variable -- in a single package.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
OneAmerica has experienced "double-digit growth" with its hybrid annuities since 2009, according to Chris Coudret, executive vice president with OneAmerica Care Solutions in Indianapolis, Indiana.
Advisors' attitudes can be another stumbling block to selling hybrid annuities, says Chris Conklin, senior vice president of product design at Genworth Financial in Richmond, Virginia.
Many of the hybrid annuities' designs feature level charges that are assessed against the interest earnings on the contract, Friedrich explains.
Despite these less-than-favorable conditions, hybrid annuities work well for clients in the right circumstances.
Hybrid annuities can benefit clients who already own non-hybrids, says Newman.
Several sources disclosed that multiple insurers have told them that when rates do increase sufficiently, the insurers plan to roll out or reintroduce hybrid annuities and pursue the market aggressively.