Crediting methods — how they work
1-Year Point-to-Point with Cap Example: Your account has a value of $100,000 at issue. The index grows from a value of 1,000 to 1,020 from issue of your contract to the first anniversary — a 2% change in the index. Because this amount is below the declared 3% cap, you will be credited the full amount of 2% on your first contract anniversary, and your account value will grow to $102,000.
2-Year Point-to-Point with Cap Example: Your account has a value of $100,000 at issue. The index grows from a value of 1,000 to 1,080 from issue of your contract to your second anniversary — an 8% change in the index. Because the cap for this two-year term is set at 6%, you will receive an index credit of 6% on your second contract anniversary, and your account value will grow to $106,000.
$106,000
$102,000
$100,000
$100,000
3.5%
9.0%
Cap
8.0%
3.0%
7.0%
Cap
2.5%
6.0%
2.0%
5.0%
4.0%
1.5%
3.0%
1.0%
2.0%
0.5%
1.0%
0.0%
0.0%
0
1
0
1
2
Contract anniversary
Contract anniversary
Index performance Declared Index Cap
Index performance Declared Index Cap
3% 2% 2%
6% 8% 6%
Index growth Interest applied
Index growth Interest applied
Index Credit
$2,000
Index Credit
$6,000
Ending account value
$102,000
Ending account value
$106,000
These are hypothetical examples for illustrative purposes only. They are not indicative of any particular time period or guarantee of future performance.
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