Annuity Contract
The written agreement between an insurance company and a customer outlining each party's obligations in an annuity coverage agreement. This document will include the specific details of the contract, such as the structure of the annuity (variable or fixed), any penalties for early withdrawal, spousal provisions such as a survivor clause and rate of spousal coverage, and more.
Investopedia Commentary
An annuity contract is one of the three accounts that can exist under a 403(b) plan. These 403(b) annuity contract plans are also known as "tax-sheltered annuities" or "tax-deferred annuities". An annuity contract is beneficial to the individual investor in the sense that it legally binds the insurance company to provide a guaranteed periodic payment to the annuitant once the annuitant reaches retirement and requests commencement of payments. Essentially, it guarantees risk-free retirement income.
Related Links
An Overview Of Annuities
Exploring Types Of Fixed Annuities
Getting the Whole Story on Variable Annuities
403(b) Plan Tutorial
See also: 403(b) Plan, Annuitant, Annuity, Deferred Annuity, Fixed Annuity, Perpetuity, Variable Annuity
Also spelled: tax-sheltered annuity, tax-deferred annuity