HOW IT WORKS
Retirement insurance that guarantees you an income
The basics of indexing and determining interest
You have the option to choose index interest, fixed interest, or both.
- The index interest option allows you to participate in market growth without putting your money at risk in the market. You choose from one or more indexes, then earn interest annually, based on positive performance of each index you’ve selected. (An index tracks the overall performance of a group of securities within an industry or market sector.)
- The fixed interest option provides one consistent rate that is specified for the duration of the contract year. The trade-off for this level of predictability is a potentially lower rate of return than the indexed interest option.
- In both cases, any interest you receive is locked in – your account can never lose value due to drops in the market.
How index interest is credited:
- We use a crediting method called annual point-to-point crediting, which tracks the performance of the index(es) you’ve chosen from one contract anniversary to the next. (A contract anniversary is the anniversary of the day your contract began.)
- On the last day of each contract year, one of two outcomes is possible:
- If the index has gone up, then you earn interest up to the amount of your “cap” (the maximum interest credit you can earn, even if the market performs higher).
- If the index has gone down, then your interest for that year is zero – but you don’t lose any interest you’ve already received.
- Any changes in the index throughout your contract year do not directly affect the interest you receive. We measure only the index value on your contract anniversary dates. That way, you’re insulated from the daily ups and downs of the market, and benefit from the long-term trends.
- On the first day of each contract year, we determine your cap for the coming year. The caps are guaranteed for one year and can be reset every contract year, but will never be less than 0.25%.
- There are a variety of factors that determine your annual cap, including market volatility and current interest rates. Capping the interest earnings on these annuities helps support the protections and guarantees we offer you.
How fixed interest is credited:
- The interest you receive is predetermined by a fixed rate that is guaranteed for your entire contract year. We calculate and credit your interest daily based on this annual rate. The fixed rate of interest can change every contract year, but it will never be less than 0.10%.
You can change your index and crediting options annually.
Because indexes can perform differently in a variety of market conditions, we offer several index options, plus the ability to change or adjust your allocations on an annual basis. This gives you more control over how you earn interest, and the flexibility to respond as your needs or the market environment changes.
Following your contract anniversary each year, you will have 21 days to make any changes to your allocations. This can be done through your online account. As long as we receive your changes within this period, they will go into effect during the new contract year. If we receive your allocation changes more than 21 days after your contract anniversary, they won’t take effect until the following contract year.
|Available Options||Cap %||Description|
|S&P 500® Index||6%|
|Russell 2000® Index||5.5%|
|Bloomberg US Dynamic Balance Index II||9.5%|
Fixed Interest is a set rate for the contract year