Terms to Know
Account Value — A contract’s premium, minus voluntary reductions and any charges, plus any interest credited. Index — A method for tracking the value of a specific group of financial assets; an index is used in a fixed indexed annuity as a factor in the formula to determine interest. Crediting Period — The period over which the performance of an index is measured and used as part of a formula to determine the interest credited to an indexed interest option. The first crediting period begins on the sweep date (see below). Each indexed interest option (including each allocation to a multi-year indexed interest option) has its own crediting period. The end of one crediting period marks the beginning of the next. A crediting period is never less than one year. Index Year — Many annual contract features are based on this repeating annual period. The first index year begins on the sweep date, which begins the repeating annual periods. The end of one index year marks the beginning of the next. Indexed Interest Option — An allocation option that credits interest based in part on the performance of an index. A multi-year indexed interest option has a crediting period of more than one index year. Interest Rate Cap — The maximum interest rate that can be credited to the account value in a given indexed interest option for its crediting period. The interest rate cap will never be less than 1%. Nonforfeiture Value — Equals 87.5% of a contract’s premium minus voluntary reductions (withdrawal charges excluded), plus interest credited at a rate guaranteed in your contract. Nonguaranteed Withdrawal — An amount taken from a contract as a partial withdrawal, partial exchange or partial annuity option. Participation Rate — The percentage of any index increase or decrease that is applied to the formula for determining the interest rate credited to the account value in a given indexed interest option for its crediting period. The participation rate is never below 10%. The participation rate can exceed 100%. S&P 500® Index — Serves as a widely recognized benchmark of the stock market performance of large U.S. companies. Changes in its value do not account for dividends. Sweep Date — The date when the account value is moved to the allocation options. A contract’s sweep date marks the beginning of its first index year and first crediting periods.
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