Annual Interval Sum A new, but familiar idea
An Annual Interval Sum, or Annual Sum, crediting method is new to fixed indexed annuities. It provides the benefit of higher crediting rates through a multi-year strategy, but with the ability to measure index performance in annual steps. While it may sound complex, here's a simple example showing how it works.
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20%
Annual Sum interest credit will never be less than 0%.
1
2
3
4
5
6
7
Floor Rate
Included in Annual Sum
Index Return
Annual Sum Credit
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
Year
Included in Annual Sum
25%
2% + 12% + (-10%) + 15% + (-7%) + 9% + 4% =
4%
24%
-16%
30%
-7%
18%
8%
Index change
Negative performance included up to -10% floor
4% gain X 50% Participation Rate in positive years
-7% (falls between 0% and -10% floor)
24% X 50%
30% X 50%
18% X 50%
8% X 50%
How it works
This hypothetical example assumes $100,000 initial premium into the 7-Year Annual Interval Sum Strategy with a 50% Participation Rate, -10% floor rate and no withdrawals. This example is for informational purposes only and is not indicative of past performance, nor intended to predict future performance of any specific product. • Since there is a -10% floor, the impact of a market loss in any given year is limited to -10%. If the cumulative performance was negative at the end of the term, there is a 0% floor for total performance. You would maintain your original premium, even if the index declined every year. In addition, your Accumulated Value and Death Benefit during the term are guaranteed to never be less than your original premium. • Participation Rate shown for illustrative purposes only. Please refer to the Product Guide for additional details and current rates. • Annual sum is the total of each year's index performance multiplied by the Participation Rate in years when the index performance is positive. In years when the index performance is negative, the sum decreases by the amount it went down, but only to the floor of -10%. • A premium of $100,000 in year 1 would be credited $25,000 in interest at the end of 7 years, for a total of $125,000.
8
Made with FlippingBook - Share PDF online