1035 Exchange

A tax-free transfer of one life insurance or annuity policy for another. The new policy must cover the same person as the old policy.


A retirement savings and investment plan, sponsored by an employer, that helps employees save for retirement. Employees make contributions to their 401(k) directly from their paycheck before taxes are taken out, and employers often match a percentage of those contributions. 


Also known as a tax-sheltered annuity (TSA) plan, a 403(b) plan is a retirement plan for certain employees of public schools and other tax-exempt organizations. 

72t Rule

An IRS Rule that allows you take substantially equal periodic payments (SEPPs) from your accounts, free of penalty—no disability, death, or unemployment required. All you need to do is agree to take consistent withdrawals based on your life expectancy which must occur over a span of five years or until the owner reaches age 59½, whichever period is longer.

A-B Trust

A joint trust created by a married couple for the purpose of minimizing estate taxes. An A-B trust is a trust that divides the assets in two upon the death of the first spouse. 

Account Value

The sum of all premiums you’ve paid in, plus accumulated interest, minus the amount of any withdrawals. The account value is not necessarily the same as the surrender or income value.


Accountants primarily provide tax advice and file tax returns in an attempt to legally minimize your taxes. In most cases, they will represent you with the IRS if you are audited.

Accumulation Period

The period in an annuity contract when annuity owners earn interest on the money they have paid into the annuity. The interest compounds and your annuity grows over time. You do not pay taxes on the interest earned while it is growing, they are due only when you take distributions from the annuity.


The person on whose life the annuity payments are based while the owner is living.


An insurance policy designed to pay income for life or a specified period of time. Annuity premiums are paid to the insurance company (insurer) and the insurer promises to pay out money from the annuity in a series of guaranteed payments.


The person who is designated by the owner to receive the remaining value of a life insurance policy, an annuity contract, or retirement plan when the owner or annuitant dies. 

Certificate of Deposit (CD)

A type of bank savings certificate where you deposit money that will earn a set rate of interest over a set period of time. The rate varies depending on the amount invested and the duration of the CD. Bank CDs are insured by the FDIC

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