Benefit Allocation Method
Method of funding a pension plan under which a single premium payment is made to fund a single unit of benefit for one year of recognized service with the employer. For example, if the employee earned an $85 unit of benefit for year X of recognized service to begin at age 60, a single premium deferred annuity would be purchased for that employee's account. Each year this procedure would be repeated as additional single premium deferred annuities would be purchased for each year of recognized service. At the time of retirement, the annuities so purchased would be combined to provide a monthly income benefit for the employee.
Popular Insurance Terms
Ordinary life insurance under which premiums are calculated so that the first few years of premiums are less than normal, and subsequent premiums are higher than normal. ...
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Life insurance premium that is not currently due. Future payments are made on a frequency basis other than annual. ...
Amount a sum of money today is worth at a specified future date because of the effect of compound interest. ...
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