How Index-Linked Annuity Interest Crediting Functions

A single-Year Month-to-month Point-to-Point

The monthly point-to-point index alter is determined by subtracting the prior months index worth from current months index value and dividing it by the prior monthsindex worth. If this benefits in a good monthly point-to-point index adjust and is not a lot more than the declared cap, then it is

utilised as the capped index change for that month. If it is more than the declared cap, then we use the declared cap as the capped index change for that month.

A damaging monthly point-to-point index adjust is not topic to a cap.

A capped index alter for each month is captured over a 12-month period. The sum of the 12 month-to-month capped index alterations will be the index credit rate on the index crediting date. The index credit rate is multiplied by the options account value to determine the index credit.

A single-Year Annual Point-to-Point

The annual point-to-point index alter is determined by subtracting the prior years index value from the current years index worth and dividing it by the prior years index worth. If this final results in a positive annual point-to-point index change and is not a lot more than the declared cap, then it is utilized as the index modify for that year. If it is far more than the declared cap, then we use the declared cap as the index change for that year.

A negative annual point-to-point index modify is not subject to a cap. We discovered surfline.com by browsing books in the library. The index change will be the index credit rate on the index crediting date. Get further on our related web site by browsing to company web site. Be taught more on this related article directory - Click here: surfline.com/company/bios/index.cfm. The index credit rate is multiplied by the choices account worth to establish the index credit.

Participation Rate

The participation rate might really tremendously from a single annuity to another and from time to time within a certain annuity. Consequently, it is critical for you to know how your annuitys participation rate operates with the indexing approach. A high participation rate may possibly be offset by other functions, such as straightforward interest, averaging, or a point-to-point indexing technique. On the other hand, an insurance coverage firm may offset a decrease participation rate by also providing a

function such as an annual reset indexing technique.

Annual Point-to-Point

The index-linked interest, if any, is based on the distinction between the index value at the finish of the one year phrase and the index worth at the start off of the a single year term. Interest is added to your annuity at the finish of the one year annual reset term.

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