Glossary

This glossary is an informal aid to help you understand some terms commonly used in the insurance industry.  These definitions do not modify or supersede the terms of any annuity contract or any life insurance policy issued by The Guardian Life Insurance Company of America or The Guardian Insurance & Annuity Company, Inc. or any of their affiliates.  Please consult the contract or policy issued to you for the specific definitions applicable under that contract or policy.

Glossary

    This glossary is an informal aid to help you understand some terms commonly used in the insurance industry.  These definitions do not modify or supersede the terms of any annuity contract or any life insurance policy issued by The Guardian Life Insurance Company of America or The Guardian Insurance & Annuity Company, Inc. or any of their affiliates.  Please consult the contract or policy issued to you for the specific definitions applicable under that contract or policy.

  • A
  • Account Valuation Date

    The date used in determining the accumulation unit values and the contract value.

  • Accumulation Phase

    The period when an annuity owner can add money and accumulate assets tax-deferred.

  • Accumulation Period

    The period between the issue date of the contract and the annuity commencement date.

  • Accumulation Unit

    A measure used to determine the value of a contract owner's interest under the contract before annuity payments begin. The contract may have variable accumulation units and fixed accumulation units.

  • Accumulation Unit Value (AUV)

    The price per accumulation unit. A new AUV is determined for each Valuation Period after dividends and distributions have been included and daily charges have been subtracted. AUVs are calculated at the close of business of the New York Stock Exchange (NYSE), usually at 4pm ET, each day the NYSE is open for trading.

  • Annuitant

    The person on whose life the annuity payments are based. (This person may or may not be the contract owner.) For certain products, a contingent annuitant may be named as well as a primary annuitant.

  • Annuitize

    To begin receiving annuity payments from an annuity.

  • Annuity

    A contract sold by an insurance company designed to provide payments to the owner at specified intervals, usually after retirement.

  • Annuity Commencement Date

    The date on which annuity payments begin.

  • Annuity Payments

    Periodic payments, either variable or fixed in nature, made by the issuing insurance company at regular intervals after the annuity commencement date.

  • Annuity Payment Increase Benefit

    A simple interest increase selected at the time the annuity is purchased and is only available with the Life Annuity with Guaranteed Period option or the Life Annuity without Guaranteed Period option.  Your financial professional can show you the effects of selecting this benefit using our illustration. All increases applied to your payments are fully taxable and will be reported as such to the IRS.  This feature is not available on all products.

  • Annuity Unit

    A measure used to determine the amount of any variable annuity payment.

  • Assumed Interest Rate (AIR)

    The interest rate used to compute the present value of any remaining unpaid payments on a contract receiving annuity payments.  Also known as Assumed Interest Return.

  • Assumed Investment Return (AIR)

    The interest rate used to compute the present value of any remaining unpaid payments on a contract receiving annuity payments.  Also known as Assumed Interest Rate.

  • Agent

    Individual who represents a client and acts on their behalf.

  • Allocation Options

    The variable investment options of a variable contract, which have corresponding, diversified open end management investment companies, and the fixed rate option available for allocation of net premium payments and accumulation units.

  • After-tax contributions

    Contributions previously subject to federal income tax.

  • B
  • Bailout Provision

    When allocated to the fixed rate option, the owner may withdraw all of the accumulation value of the Fixed Rate Option or make an unscheduled partial withdrawal without that amount being subject to a contingent deferred sales charge if the current interest rate falls below the bailout rate.

  • Beneficiary

    The individual, institution, trustee, or estate eligible to receive the death benefit payable under the annuity contract or life insurance policy.

  • Broker-Dealer

    A firm that acts on behalf of a client.

  • Business Day

    Each day the New York Stock Exchange is open for business.  The business day usually ends at 4:00 PM Eastern Time but may close earlier due to holidays or special situations.

  • Business Reducing Term

    Disability insurance designed to help protect an owner’s ability to make payments on an insurable interest for a specific term if the insured becomes disabled as defined by the policy and meets all other terms and conditions of the policy.

  • C
  • Confirmation Statement

    A statement issued after a transaction to confirm the details of the transaction. Also called a Confirm.

  • Contingent Annuitant

    The person named in the application to become the annuitant depending on product rules. Certain rules apply to naming a contingent annuitant, and this feature is not available under all contracts.

  • Contingent Deferred Sales Charge (CDSC)

    A charge imposed for terminating or taking a withdrawal from an annuity contract prior to a given time period as defined by the contract.

  • Contract Fee

    An annual maintenance fee; usually $35 (lower where required by state law).  Some contracts allow the waiver of the fee when the accumulation value is $100,000 or higher on the anniversary date.

  • Contract Owner

    The person(s) or entity designated as the owner in the contract. The contract owner has the right to make withdrawals, surrender, or change certain terms of the contract (i.e. beneficiary designation).

  • Contract Value

    The value of all the accumulation units in the variable investment options and/or the fixed-rate option credited to a contract.

  • Cost Basis

    Amount of after tax money paid to a non qualified annuity. Also known as Principal.

  • Collateral Assignment

    Ownership rights in an annuity contract or a life insurance policy are transferred to an institution, typically a bank, to serve as collateral for a debt. A collateral assignment of a nonqualified annuity is considered a taxable event to the owner of the contract. Because the rules around collateral assignments are complex and the action you will take will depend on your individual circumstances, please consult your tax advisor to see if any additional tax laws apply to your particular situation.

  • Contingent Beneficiary

    The individual, institution, trustee, or estate eligible to receive the death benefit payable under the annuity contract or life insurance policy in the event that the primary beneficiary dies before the benefit becomes payable.

  • Contract Anniversary Date

    The annual anniversary measured from the issue date of the annuity contract or the policy date of the life insurance policy.

  • D
  • Disability Income Insurance

    Insurance intended to pay monthly benefits for up to a specified period when the insured is disabled as defined by the policy. 

  • Disability Overhead Expense Insurance

    Insurance designed to reimburse the policy owner for covered Overhead Expenses incurred in the normal course of business when the insured is disabled.

  • Dollar Cost Averaging

    An investment strategy intended to try to lower your average dollar cost of investing over time. Within a variable annuity, specific amounts of money are transferred from one investment option to another on a monthly basis, rather than investing the total amount at one time. Available under certain variable annuity contracts. Dollar cost averaging does not ensure profit or prevent loss. Since dollar cost averaging involves continuous investing regardless of market fluctuations, the financial ability to make purchases through periods of low price levels should be considered.

  • Death Benefit (Annuity Contract)

    The payment made to a beneficiary of an annuity upon the death of the annuitant or owner before the annuity payments begin depending on product rules.

  • Death Benefit (Life Insurance Policy)

    The amount of benefit that will be paid to a beneficiary in the event of the death of an insured person.

  • DIA Transfer Purchase Amount

    The amount of the DIA payment purchased as the result of a DIA transfer.

  • DIA Transfers

    Transfer of Accumulation Value under the Basic Contract to this rider. DIA Transfers are subject to any requirements and limitations stated in this rider. The initial DIA Transfer is the first transfer under this rider and is the time the Owner chooses the DCD and Annuity Payment Option.

  • DIA Payee

    The person(s) named by the Owner to receive DIA Payments. In the absence of a named DIA Payee, the Owner will be the DIA Payee.

  • DIA Payment Option

    An option under which DIA Payments are made in accordance with the provisions of this rider. The list of available options is set forth in the DIA Payment Options provision. The DIA Payment Option is chosen at the time of the initial DIA Transfer request. After the initial DIA Transfer has been processed, and the right to cancel said transfer has expired without exercise, the DIA Payment Option cannot be changed.

  • DIA Payment Guaranteed Period End Date

    For DIA Payment Options that have a guaranteed period, the date on which any guaranteed period will end. While DIA Payments will continue beyond this date if the Annuitant is still living, this date will be the earliest date on which DIA Payments end unless the present value of remaining payments is received by the Beneficiary due to the death of the annuitant. For DIA Payment Options that offer a Refund Certain, this is the date on which the accumulated DIA Payments equals the total of all DIA Transfers. This date may change if the right under the Changing the DIA Commencement Date provision is exercised.

  • DIA Payment

    A regularly scheduled payment that is payable to the DIA Payee under the terms of this rider. The amount of this payment is equal to the sum of the DIA Transfer Purchase Amounts.

  • DIA Commencement Date (DCD)

    This is the date chosen by the Owner on which DIA Payments will begin. The DIA Commencement Date (DCD) is elected at the time of the initial DIA Transfer request and cannot be subsequently changed unless the Changing the DIA Commencement Date provision is exercised.

  • DIA

    Deferred Income Annuity

  • E
  • Enhanced Death Benefit Termination

    Termination of an enhanced death benefit rider. Certain annuity contracts offer one or more enhanced death benefit riders for an additional charge. Upon termination of the rider, as described in the prospectus, no additional charge will be deducted and the death benefit payable will be the contract's basic death benefit. Rider termination is not available on all products and a terminated death benefit rider cannot be reinstated.

  • Excludable Amount

    The Excludable Amount is that portion of an annuity payment which is not subject to income tax when it is received since it is considered to be the return of the original principal. The ratio of the taxable portion of an annuity payment to the non-taxable portion is called the Exclusion Ratio and is determined by Internal Revenue Service rules. The taxable/nontaxable portion of the last applicable payment subject to an exclusion ratio may differ. Once the total of the non-taxable portion of your payments equals your investment in the contract, all future payments are fully taxable.

  • eDelivery (Electronic Delivery)

    A service offered by Guardian that provides you with paperless online delivery of your Annual Benefit Statement for your life insurance policy, and Contract Statements and the most current Prospectuses and Reports for your annuity contract.

    Contract Statements include Quarterly, Anniversary, Annual and Confirmation statements. Prospectuses and Reports include Contract and Fund Prospectuses and Supplements as well as Semi-Annual and Annual Fund Reports.

  • F
  • Fair Market Value

    Price the contract would be given in the market place based on an actuarial calculation.

  • Fixed Rate Option (FRO)

    Allocation Option guaranteeing net premiums will earn a minimum interest rate as defined by the contract. Certain restrictions apply.

  • Full Surrender

    Redemption of the entire annuity contract before the date annuity payments begin.

  • Funds

    The open-end management investment companies, each corresponding to a variable investment option. The Funds available under your contract are listed on the front page of the contract prospectus.

  • Free Look Period

    A period of time following a purchaser's receipt of a contract or policy. The contract or policy may be cancelled by the purchaser within the specified review period.

  • G
  • Good Order

    Notice from any party authorized to initiate a transaction under this contract that is received in a format satisfactory to GIAC at its customer service office and contains all information required by GIAC to process that transaction.

  • I
  • In Force Status

    Contract is active.

  • In Force - Payout Status

    Contract is annuitized.

  • Investment Options

    Allocation options of a variable contract, which have corresponding, diversified open end management investment companies, and the fixed rate option available for allocation of net premium payments and accumulation units.

  • Issue Date

    The date on which the annuity contract or life insurance policy is issued.

  • L
  • Living Benefit Termination

    Termination of a living benefit rider. Certain annuity contracts offer a living benefit rider for an additional charge. Special rules apply to the contract when the rider is in force. Not all available living benefit riders can be terminated and a terminated living benefit rider cannot be reinstated.  See prospectus to determine termination options.

  • M
  • Matured Status

    Contract has reached the end of the annuity payments.

  • Mortality and Expense Risk Charge

    A variable annuity fee included in certain annuity products which serves to compensate the company for various risks it assumes under the annuity contract.   Also known as M & E.

  • P
  • Partial Withdrawal

    A partial redemption of the annuity contract before the date annuity payments begin.

  • Penalty Free Amount

    Amount of withdrawal  you are allowed to make without paying a contingent deferred sales charge (CDSC).

  • Pending Status

    Contract is awaiting initial premium in order to be active.

  • Percentage of Total Allocation

    The percentage indicating how a particular transaction was allocated among the Options. For each transaction, the sum of the percentages for all of the Options will be 100%.

  • Principal

    Amount of after tax money paid to a non qualified annuity.  Also known as Cost Basis.

  • Prospectus

    A legal document required by the Securities Act of 1933 when offering securities for sale. It must contain specific information that is intended to assist the client in deciding whether or not the investment is appropriate. For variable annuities, there are 2 types of prospectuses: contract and fund prospectuses.

  • Purchase Payment

    A premium payment made to the annuity contract.

  • Pending In Force Status

    The contract initial premium has been received and the annuity contract is waiting to be issued.

  • Personal Security Code (Code)

    A five character combination of numbers and/or letters used by the contract owner to process certain transactions such as allocation option transfer requests and changes in future allocations over the phone by calling 1-800-221-3253 between 8:30 AM and 4:00 PM Eastern Time on any day we are open for if you have authorized us to do so by establishing a Personal Security Code (Code).  We reserve the right to limit the frequency of transfers to not more than one per thirty days and to impose a charge for transfers. Other rights reserved by GIAC with respect to transfers are described in your contract and prospectus, including the right to refuse transfers under certain conditions. Specific transfer restriction rights maintained by GIAC vary from contract to contract.

  • Q
  • Qualified Contract

    An annuity contract that is established in accordance with specific Internal Revenue Code guidelines and is eligible for special tax considerations. Your rights under a qualified contract may be subject to terms of the Internal Revenue Code, regardless of the terms of the contract. Examples of qualified contracts include Individual Retirement Accounts (IRAs), qualified retirement plans and tax-sheltered annuities (TSA).

  • Qualifying Longevity Annuity Contract (QLAC)

    A deferred annuity contract intended to provide a stream of income beginning at a fixed future date purchased with Individual Retirement Account (IRA) assets. IRA assets used to purchase the QLAC are not included in required minimum distribution (RMD) calculations.

  • R
  • Rate of Return

    In performance measurement, the percentage change in the value of an investment over a specified time period.  The Rate of Return for each investment option can be found by clicking on the name of the investment option.

  • Rebalancing

    An adjustment to the holdings within your variable annuity contract resulting in a shift in your holdings to the original percentage allocations.

  • Required Minimum Distribution (RMD)

    The Internal Revenue Service requires that IRA owners withdraw a minimum amount from their account every year beginning in the calendar year they turn 70 1/2. These withdrawals are called Required Minimum Distributions or RMDs. RMDs do not apply to Roth IRAs.

  • Rider

    An addendum to the contract or policy that may provide an additional benefit.  Often optional and available for an additional charge or premium.

  • Rider Fee

    Additional charge or premium to purchase a contract or policy rider.

  • S
  • Schedule A

    A tax form used to report information regarding employee benefits plans. Any sponsor or administrator of a plan subject to the Employee Retirement Income Security Act of 1974 (ERISA) is required to file this form with the IRS each year.

  • Systematic Withdrawals

    An optional plan where partial withdrawals are taken from your contract automatically on a regular basis

  • Surrendered Status

    Contract has been closed or policy has been terminated.

  • Single-Premium Deferred Annuity (SPDA)

    A tax-deferred fixed annuity contract under which a contract owner makes a single premium payment.

  • Status

    The state of your annuity contract.
    In Force - Contract is active.
    In Force - Payout - Contract is annuitized.
    Pending Inforce - The contract initial premium has been received and the contract is waiting to be issued.
    Pending - Application is awaiting initial premium in order to issue the contract.
    Matured - Contract has reached the end of the annuity payments.
    Surrendered - Contract has been closed.

  • Surrender Value of an Annuity Contract

    The value of all the accumulation units in the variable investment options and/or the fixed-rate option credited to a contract minus any applicable charges and/or fees.

  • Single Premium Immediate Annuity (SPIA)

    A Single Premium Immediate Annuity is an annuity in which a lump sum premium is converted to a stream of income that begins either immediately or within the first year of establishing the contract.

  • T
  • Tax Qualification Change

    A change in the tax qualification status of the contract. Please consult your tax advisor to see if any tax laws apply to your particular situation.

  • Transfer

    A transfer of money among the variable investment options and/or Fixed-Rate Option under an annuity contract.

  • V
  • Variable Annuity

    An annuity contract which provides future payments to the contract owner, usually at retirement, the size of which depends on the performance of the underlying investment options.

  • Valuation Period

    The time period used to determine the accumulation and annuity unit values.

  • Variable Investment Options

    The Funds underlying the contract are the variable investment options-as distinguished from the fixed-rate option-available for allocations of net premium payments and accumulation values.

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