Definition and Key Terms
Is the Highlander ® right for you?
Fixed Rate Strategy Value A fixed rate strategy value equals the amount applied to the 1-year fixed rate strategy, less any amounts withdrawn, including any early surrender charges deducted from those amounts, plus interest credited at the 1-year fixed interest rate. Indexed Strategy Value An indexed strategy value equals the amount applied to an indexed strategy, plus Index Credits, if any, less any gross withdrawals. Account Value The account value equals the premium you pay into your annuity and any interest we credit. Withdrawals, surrender charges, and any other fees or charges will decrease your account value dollar-for-dollar. Surrender Value The surrender value equals the account value, plus or minus the market value adjustment that would apply on a surrender, and minus the surrender charge that would apply on a surrender. Your cash surrender value will never be less than the Minimum Guaranteed Contract Value. Cap A cap is a preset limit that we use to calculate the Index Credit for an index allocation with some crediting methods. With some point-to-point crediting options, we apply a cap, the interest rate is equal to the cap percentage. Caps for the first Term are established when you purchase your Contract. On the Contract Anniversary of the Term, we may change these caps for the coming Term. Caps will never be less than the guaranteed minimum rate.
Participation Rate A participation rate is a preset limit that we use to calculate the Index Credit for an index allocation with some crediting methods. The participation rate for the first Contract Year is established when you purchase your Contract. On the Contract Anniversary of the Term, we may change this rate for the coming Term, but it will never be less than the guaranteed minimum. Point-to-Point The index credit is based on the gain in the index from two points in time, the beginning of the Term and the end of the Term. Index Credits The Index Credit is the amount credited to the Strategy at the end of each Term. It is calculated by applying the rates from the particular strategy to the growth in the index over the Term. Credits can only be applied at the end of the Term. Market Value Adjustment Any amounts that are assessed a surrender charge will also be subject to an MVA, which may increase or decrease the Account Value. The MVA generally increase the contract withdrawal value when interest rates fall, and decrease the contract withdrawal value when interest rates rise. The MVA is not applicable in all states.
The MVA is not applied:
• At the end of the surrender charge period;
• To free withdrawals;
• To the death benefit for the death of owner.
Do other options often seem too complicated? In today’s environment of multiple investment options and ways to prepare for retirement, it is quite easy to have it all become much too complicated. The Highlander ® focuses on simplifying this daunting task by offering the opportunity to enjoy the positives of the S&P 500 market index, while mitigating the risk of a declining market.
Would you like peace of mind?
The Highlander ® annuity gives you the opportunity to grow your assets and build income for the future. The simplicity of one index, the guarantee of a fixed account, and growing income potential provides balance and peace of mind!
Does your money have good balance?
In our early accumulation years, it is okay to take on risk for the potential of greater returns. Many nearing retirement decide to flip the switch and go a completely conservative route. With the Highlander ® , there is an option for balance of capturing a portion of the gains in the market and protecting you against any market downturns.
12 Highlander ® Fixed Index Annuity
13 Clear Spring Life and Annuity Company
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