Key terms
Key terms
General Definitions Term Point-to- Point with Cap
Index Strategy-Specific Definitions Participation Rate with Volatility Limit
Index strategy where at the end of the term, we compare the value of the applicable index to its value at the beginning of the term and apply index interest credit for any positive change up to the stated Cap. An upper limit to the percentage of gain in the value of the index. For example, if the index experiences... • A positive return of 12% and there is a 7% Cap Rate, the interest credit would be 7%. • A more modest positive return of 3%, the interest credit would be 3%. • A negative return then your interest credit is 0%. Index strategy that credits interest at a declared rate (“PT Interest Rate”) based on a positive return of the index at the end of the term. The rate is fixed regardless of the index’s positive return. A declared rate that is credited based on a positive return of the index. For example, if the index experiences... • positive return of 12% and there is a 6% PT Interest Rate, the interest credit would be 6%. • A more modest positive return of 3%, the interest credit would still be 6%. • A return that is less than or equal to 0% results in 0% interest credit. Index strategy where we compare the value of the applicable index at the end of the term to its value at the beginning of the term. If the change is positive, we multiply the percentage change by the Participation Rate to determine the amount of interest credited. A factor applied to the performance of an index that is used to determine the index interest credit for an Index Strategy. This is a no cost feature that has the potential to increase both the size and likelihood of an interest credit for money allocated to an Index Account option. The initial starting index value is set using the lowest index value following the first 90 days of your contract issue date. This feature applies to any Index Account option your initial premium is allocated to. It does not apply to any subsequent terms following the first contract year. A percentage applied to the Account Value of an Enhanced Index Account at the beginning of the term and deducted at the end of the term. The initial Enhancement Fee Rate is set at contract issue and guaranteed for the first index term. A new Enhancement Fee Rate will be declared at the start of each subsequent index term. The Fixed Account and Index Accounts without an enhancement are not subject to an Enhancement Fee.
This index strategy sets a limit on changes to the index value of the applicable index. Change, or volatility, is measured daily by tracking the Accrued Variance during the term. On the first business day the Accrued Variance breaches the Variance Threshold, the index value is locked in on that date (“Expiry Date”). This becomes the index value we use at the end of the term to determine any interest credit, even if the index value increases or decreases between the Expiry Date and the end of the term. If the Accrued Variance has not met the Variance Threshold before the end of the term, we will compare the index value at the end of the term to its value at the beginning of the term. A Participation Rate is applied to a positive change in the index to determine any interest credit. The maximum level of index variance permitted over the term. It is determined at the beginning of the term using the Volatility Limit. If the Accrued Variance equals or exceeds the Variance Threshold on any business day, that day will be the Expiry Date and the index return is locked at that level for the remainder of the term. The maximum level of index volatility permitted per year. The Volatility Limit is declared by us based on the applicable index. Index volatility is the amount of price variation in the index. A higher volatility means the index value can potentially be spread out over a larger range of index values. A low volatility means the index value does not change as dramatically, but rather changes at a more gradual pace. This index strategy adds a Boost Rate to the return of an index at the end of the term if a Knockout has not occurred. If a Knockout has not occurred, we will compare the index value at the end of the term to its value at the beginning of the term and add a Boost Rate to the percentage change in the index. A Participation Rate is then applied to the boosted index return to determine the amount of interest credit. A Knockout is an event that cancels an index interest credit and occurs if the index value drops below the Knockout Barrier at any point during the term. If a Knockout occurs, you will not receive an interest credit and may not transfer your index value to another index strategy until the end of the term. An increase that will be factored into the amount of interest credited at the end of a term if a Knockout is not triggered during the term. The additional percentage that is used in the calculation of the index return if a Knockout is not triggered during the term. For example: • If the index experiences a positive return of 12% and the Boost Rate is 2%, the return used to calculate interest credit is increased to 14%. The percentage used to determine the Knockout Barrier at the beginning of the term. This value determines if a Knockout is triggered. The Knockout Barrier is determined by applying a percentage to the index value at the beginning of the term. For example: • If the index value at the beginning of the term is 2000 and the Knockout Rate is 98%, then the Knockout Barrier value would be 1960.
Cap Rate
Term Performance Trigger Performance Trigger (PT) Interest Rate
Variance Threshold
Volatility Limit
Term Point- to-Point with Participation Rate, Boost, and Knockout
Term Point- to-Point with Participation Rate Participation Rate Lowest Starting Index Value
Boost
Boost Rate
Enhancement Fee Rate
Knockout Rate
Knockout Barrier
Delaware Life PrimeStart Bonus 10 SM Fixed Index Annuity
Delaware Life PrimeStart Bonus 10 SM Fixed Index Annuity
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