FAQs - InjAnnuity Inc.
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  • FAQs
    • Why InjAnnuity?
    • What can this website do for me?
    • What do Insurance Companies prefer that I don't get to know about?
    • What are the different types of Deferred Annuities supported by this Website? >
      • What is a "Fixed" Deferred Annuity?
      • What is a Fixed Indexed / Equity Indexed Annuity?
      • What is a Variable Annuity?
    • What Kind of Options can I exercise? >
      • What are Guaranteed Lifetime Benefits (GLIBs)? >
        • What is a Guaranteed Minimum Income Benefit (GMIB)?
        • What is a Guaranteed Minimum Accumulation Benefit (GMAB)?
        • What is a Guaranteed Minimum Withdrawal Benefit (GMWB)?
        • What is a Guaranteed Life Withdrawal Benefit (GLWB)?
        • What is the difference between an Annuitization and a GLWB or GMWB?
      • What is a contract's Surrender Value?
      • What are Free Withdrawals (also called Charge-Free Withdrawals)?
      • What is Annuitization?
      • What is a Rider?
    • Is a DA a good buy?
    • More Q&A >
      • Why is it called "Deferred"?
      • What is an "Account Value" (or "Accumulation Fund")?
      • What is a "Shadow Fund"?
      • What are "Surrender Charges"?
      • PV-Discounts
    • Longevity
    • Variable Tutorial
    • YouTube Playlist
  • Related Sites
    • DARMA™
    • Integrated Actuarial Systems, Inc
    • Corporate Risk Compliance, Inc.
What is an "Account Value" (or "Accumulation Fund")?
Q: What is an "Account Value" (or "Accumulation Fund")?
A: A deferred Annuity works much like a restricted interest-earning bank account; except, instead of having to report the interest on your tax return each year, the interest is deferred until you withdraw money. You can make deposits and withdrawals, and it may be subject to fees. The resulting balance earns the interest.

This "bank account" feature is fundamental to all Deferred Annuities. Whether they're Fixed, Indexed, or Variable, they all operate the same way. The only difference is in how the crediting rate and fees are determined and applied.

Often times, it can be quite complicated for the Policyholder to understand just how the Insurance Company determines and applies these rates and fees.

Here are some of the typical restrictions:
  • There are limits to how much you can withdraw in any one year.
  • There are penalties ("Surrender Charges") for closing the account early.

At any time, now or in the future, you can use the then-current account balance (a.k.a. the Account Value). Typical uses include:
  • Use it to purchase an Annuity (series of payments to you).
  • Use it to purchase a Guaranteed Income stream (series of payments to you).
  • Use it to pay a Beneficiary (in the event of your death).
  • Use it to pay Long-Term Care bills (if you become disabled).
  • Subject to penalties, withdraw a portion (or all), for other purposes.
  • Get other financial returns (depending on the contract).

Please note: your Account Value may not be the only dollar figure used to determine values in the above items. (See "Shadow Funds" and "Minimum Guarantees".)

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  • Home
  • FAQs
    • Why InjAnnuity?
    • What can this website do for me?
    • What do Insurance Companies prefer that I don't get to know about?
    • What are the different types of Deferred Annuities supported by this Website? >
      • What is a "Fixed" Deferred Annuity?
      • What is a Fixed Indexed / Equity Indexed Annuity?
      • What is a Variable Annuity?
    • What Kind of Options can I exercise? >
      • What are Guaranteed Lifetime Benefits (GLIBs)? >
        • What is a Guaranteed Minimum Income Benefit (GMIB)?
        • What is a Guaranteed Minimum Accumulation Benefit (GMAB)?
        • What is a Guaranteed Minimum Withdrawal Benefit (GMWB)?
        • What is a Guaranteed Life Withdrawal Benefit (GLWB)?
        • What is the difference between an Annuitization and a GLWB or GMWB?
      • What is a contract's Surrender Value?
      • What are Free Withdrawals (also called Charge-Free Withdrawals)?
      • What is Annuitization?
      • What is a Rider?
    • Is a DA a good buy?
    • More Q&A >
      • Why is it called "Deferred"?
      • What is an "Account Value" (or "Accumulation Fund")?
      • What is a "Shadow Fund"?
      • What are "Surrender Charges"?
      • PV-Discounts
    • Longevity
    • Variable Tutorial
    • YouTube Playlist
  • Related Sites
    • DARMA™
    • Integrated Actuarial Systems, Inc
    • Corporate Risk Compliance, Inc.