Annuities explained

Definitions  Accumulation Value Account – this is the money that is yours, the principal or premium.  Annual asset Fee - Typically a charge or a percentage amount that is deducted from the index growth calculation.(4)  Annual lock-in - the act of locking in earned credits in regards to annuities.  Annual reset - A way of calculating annual yield for an index annuity in which the baseline from which growth is measured resets every year. With an annual reset, previous years' growth is never lost.(1)  Arm's Distance - an idiom meaning keeping oneself at a distance. If one is at arm's distance from someone or something, then that someone or something cannot touch them.  Being Transparent - allowing all information and intents to be boldly spoken of and addressed.  Cap - Some annuities may put an upper limit, or cap, on the index-linked interest credit. This is the maximum credit or rate of interest the annuity will earn, typically expressed as a percentage. Not all annuities carry a cap rate. (2 , 4)  Crediting Strategy – the concept of earning interest in an index annuity product.  Custodian – the company that is holding funds, usually IRA funds are what we are speaking of.  Fiduciary – acting in the best interest of the client. Not all advisors are bound by this principle. Investment Advisors are bound by this principle.  Spread - A preset deduction from the percentage of indexed growth that is used to calculate the indexed interest rate that is credited to an annuity contract each year. The spread will reduce the percentage of annual growth that an annuity can potentially earn in a given contract year. (3.)  Suitability – define