CAP RATE With a Cap Rate option, crediting is earned up to the Cap Rate percentage if the index performance is positive. If the index performance is negative, 0% is credited. The Cap Rate is determined at contract issue and is guaranteed for the Index Crediting Period. The Cap Rate may change for any other period but will never be less than the Guaranteed Minimum Cap Rate. POINT-TO-POINT With a Point-to-Point option, the index performance is calculated based on two points – the beginning and end of the Index Crediting Period. The interest is then credited to your contract based on the change in the index during that period, either using the Participation Rate or Cap Rate. These examples assume a Participation Rate of 50%, and Cap Rate of 5%.
ANNUAL POINT-TO- POINT 5% CAP RATE
ANNUAL POINT-TO-POINT 50% PARTICIPATION RATE
Index Performance
Credit to Account
Credit to Account
6.00% 2.00% 0.00%
12.00% 4.00% -0.60%
5.00% 4.00% 0.00%
MONTHLY SUM With a Monthly Sum option, crediting is based on index performance and is calculated based on the sum of 12 monthly percentage changes and subject to the Cap Rate. This example assumes a Monthly Sum Cap Rate of 1.5%.
MONTHLY RETURNS
CAPPED MONTHLY RETURNS
End of Contract Month
Year 1 3.00% 6.00% 4.00% -1.00% 1.50% -2.00% 4.00% -1.00% 2.00% 1.00% -4.00% 6.00%
Year 2 2.00% 4.00% -6.00% 1.00% -1.00% 2.00% -3.00% 4.00% 2.00% 1.00% -4.00% 6.00%
Year 1 1.50% 1.50% 1.50% -1.00% 1.50% -2.00% 1.50% -1.00% 1.50% 1.00% -4.00% 1.50% 3.50% 3.50%
Year 2 1.50% 1.50% -6.00% 1.00% -1.00% 1.50% -3.00% 1.50% 1.50% 1.00% -4.00% 1.50% -3.00% 0.00%
1 2 3 4 5 6 7 8 9
10 11 12
Sum of Capped Returns
INDEX CREDIT
CONSUMER GUIDE - HIA-CG-01-2023
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