Which Crediting Method is Right for You?

Because there is no predictable method of determining how an Index Crediting Option will perform in any given contract year or over the life of the contract, it may be in your best interest to consider allocating premium among more than one option. Consider the following hypothetical examples with the S&P 500® Index starting value of 1000 and ending value of 1100 for one contract year. Based on the Index Crediting Option selected and the pattern of movement in the S&P 500® Index throughout the contract year, the results could be very different.

Hypothetical Patterns of Movement

The Ramp The Valley The Mountain The Roller Coaster
S&P 500® Index Change 10.00% 10.00% 10.00% 10.00%
Annual Pt. to Pt. (with 7% cap) 7.00% 7.00% 7.00% 7.00%
Monthly Avg. (with 8% cap) 5.24% 2.00% 8.00% 5.04%
Monthly Pt. to Pt. (with 2.5% cap) 9.57% 7.11% 7.17% 0.00%
Blended Crediting Rate* 7.27% 5.37% 7.39% 4.01%
You Have a Choice

With an Index Annuity, you do not need to guess each year which Index Crediting Option will perform best. An Index Annuity offers the choice of allocating premium among three Index Crediting Options and one Fixed Interest Crediting Option. Additionally, as your needs change, you can transfer premium between Interest Crediting Options on each contract anniversary without incurring a Surrender Charge. Furthermore, in years where the S&P 500® Index has a negative return, your Index Credit Rate can never be less than zero. Most Index Annuities offer the following Interest Crediting Options:

  • Annual Point-to-Point Index Crediting Option
  • Monthly Average Index Crediting Option
  • Monthly Point-to-Point Index Crediting Option
  • Fixed Interest Crediting Option

The contract does not directly participate in any stock or equity products. Withdrawals do not participate in index gains. This is for illustrative purposes only. Past performance is no guarantee of future results. The interest crediting rate is subject to a maximum or “cap” set each contract year. An asset fee, if any, is guaranteed for the life of the contract. All hypothetical examples assume an asset fee of 0%.

* Assumes one third of premium in each Index Crediting Option.

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