assumed interest rate

Definition

Interest rate utilized by insurance companies to calculate the value of an annuity contract and the income payments made to the annuitant. A number of factors including the assumed interest rate, the annuitant's age, and the amount of annuity payments can determine how much periodic income the annuitant will get from the investment. The higher the annuitant's assumed interest rate, the better the return he or she will receive on it. also called assumed investment return or AIR.
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assumed bond assumption