GCPA Glossary

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Tax deferred
Federal or state income tax is not paid on contributions or earnings until the money is withdrawn.

Tax-deferred annuity
There are basically two parts to an annuity contract. That is, the accumulation phase (when deposit(s) are made) and the pay-out phase (when the annuitant receives income). During the accumulation phase of an annuity contract the capital accumulates on a tax-deferred basis. This accumulation is not taxed until it is withdrawn (at a later date, usually retirement). Withdrawals taken prior to age 59 1/2 may incur a 10 percent federal income tax penalty.

Term life insurance
Life insurance under which the benefit is paid if the insured dies during a specified period of time. Benefits are not payable if the insured survives to the end of the term.

Total disability
Insureds are considered totally disabled if they are unable to perform the important duties of their regular occupation because of injury or sickness, aren't working in another gainful occupation and are under a physician's care.

Treasury Bill Index (90-day)
A commonly used benchmark to gauge the performance of money market, short-term securities. An index is unmanaged. You cannot invest directly in an index.

Treasury Bills
A negotiable debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of one year or less. Treasury bills are exempt from state and local taxes.

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