Section 1035 of the Internal Revenue Service Code allows the movement of non-qualified monies from certain financial products to others without an income tax consequence. This is called a "1035 Exchange." A 1035 Exchange allows non-qualified monies from an annuity to move to another annuity, from a life insurance policy to another life insurance policy, or to move from a life insurance policy to an annuity. An exchange from an annuity to a life insurance policy is NOT a 1035 Exchange and may result in income tax consequences.
A fee assessed on certain mutual funds or share classes permitted under an SEC rule to help cover the costs associated with marketing and selling the fund. 12b-1 fees may also be used to cover shareholder servicing expenses.
An evaluation of securities by an independent rating service, such as Standard & Poor's, Moody's, Fitch, and A.M. Best. Ratings are typically used to evaluate corporate and municipal bonds.
High Quality - AAA, AA, A; or Aaa, Aa, A ; or Aa1, Aa2, Aa3 Medium Quality - BBB, BB, B; or Baa, Ba, B; or Ba1, Ba2, Ba3 Low Quality - CCC, CC, C; or Caa, Ca, C; or Ca1, Ca2, Ca3 In Default or Questionable Value - DDD, DD, D.