Indexed Annuities

    An indexed annuity is designed to be a long-term retirement planning tool with many features to help clients achieve the standard of living they want
    during retirement. Various income options are available at the annuity commencement date.

    An indexed annuity offers the potential for increased interest earnings, up to a cap, based on the performance of the S&P 500 Index (excluding
    dividend income) each policy year. The insurance carrier determines the interest to be credited, if any, to the equity indexed account by comparing
    the index value on the current anniversary to the index value on the prior anniversary or the policy issue date (for the policy’s first anniversary) as
    follows (special rules apply to anniversary dates that fall on holidays or weekends):

  • The index change is determined by subtracting the prior anniversary’s index value from the current anniversary’s index value and then dividing
    the difference by the prior anniversary’s index value.
  • If the results are a positive index change, the percentage change in growth will be used to determine index interest. If the positive percentage
    index change is greater than the current cap, however, the current cap percentage is used to determine the interest rate credited to the
    account value.
  • If the index change is negative, no loss of principal is incurred during the deferral period and the value of the equity indexed account does not
    change.
  • Interest credited annually may fluctuate along with market and other economic conditions. Past performance does not guarantee future
    results. A prolonged downturn in the stock market, the payment of premium tax, and/or fees and charges could ultimately lead to a loss in
    principal.

    Lock in Gains with the Annual Reset Feature
    The annual reset method credits interest based on positive movement of the index up to an annually declared cap. If the index decreases,  no
    interest is credited. This method locks in the interest earned in positive years while protecting principal and accumulated interest from any years
    with negative returns.

    Cap
    The cap is set in advance for each policy year and may change from year to year. The cap is the maximum percentage that can be used to
    determine the interest credited in the equity indexed account for that policy year. The initial cap is shown in the policy. In most states, there is no
    maximum or minimum on the cap.

    Cap Bailout Rate
    This policy has a bailout provision. If the company declared cap for a policy year is less than the cap bailout rate specified at policy issue, then the
    owner may surrender or take a partial withdrawal from the policy during the first 30 days of that policy year with no company-imposed surrender
    charges. During this window, the owner will also have the option of transferring money to the guaranteed interest account. The cap bailout rate is
    shown in the policy.

Indexed Annuities
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