periodic purchase deferred contract(redirected from Periodic Purchase Deferred Contracts)
Periodic purchase deferred contract
Periodic Purchase Deferred Contract
An annuity purchased with periodic payments by the annuitant, who does not begin to receive payments until some future date. Like all deferred annuities, a periodic purchase deferred contract has two phases, a savings phase and an income phase. The savings phase involves the annuitant making the periodic payments and having them invested on his/her behalf. In the income phase, the annuitant receives payments. It is important to note that a periodic payment deferred contract, like most deferred annuities, is not taxed until the income phase begins. It also may pay a death benefit to the survivor(s) of the annuitant. See also: IRA, 401(k).
periodic purchase deferred contract
A deferred annuity purchased with a series of premium payments. For example, an individual might obtain a lifetime monthly income by making annual premium payments to an insurance company prior to retirement. Compare single-premium deferred annuity.