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wraparound annuity

A tax-deferred annuity contract that provides the annuitant with the ability to determine what the underlying investments should consist of. The annuitant is not required to pay taxes on the annuity until the funds are withdrawn and converted to cash. The Internal Revenue Service no longer allows an individual to shelter funds in a wraparound annuity if the underlying investments could be purchased without a tax deferral.

Related information about wraparound annuity:
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    A type of annuity that allows the investor (the holder of the annuity) control in the underlying investments in the annuity plan. An annuity is tax-deferred contract ...
     
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