How is the indexed interest calculated? There are two ways interest can be calculated:
1. Point-to-point method Indexed interest is calculated by comparing the value of the index at the beginning and the ending date, either after one year (1-year point-to-point) or two years (2-year point-to-point), depending on your choice. The point-to-point method (both 1-year and 2-year) is available for all three indexes.
Using this method, if the value is lower at the end of the point-to-point period than at the start, you are protected from losing any cash value. When the index is positive, you get interest credited based on the positive increase of the index, subject to a cap rate and/or participation rate. 4
The Participation Rate is the percentage of the change of the index in which you participate.
100% Participation Rate
60% Participation Rate
140% Participation Rate
The Cap Rate is the maximum interest or upper limit that may be credited. For example, a cap of 10% means that 10% is the most that the chosen indexed crediting strategy will be credited.
How Your Cash Value Grows
STEP 2. Premium is allocated to the crediting strategies of your choice.
STEP 1. Pay your premium.
STEP 3. At the end of the 1-year or 2-year index crediting period, we calculate the change in your chosen interest crediting strategies. • If the change is positive, your policy is credited interest after applying any caps and participation rates. • If the change is negative, your policy is credited 0%.
Positive Calculated Change in Chosen Strategy Index % Change =
14.924% 10.000%
Interest Credited =
Negative Calculated Change in Chosen Strategy Index % Change =
-1.290%
Interest Credited =
0.000% Assumes Participation Rate 100%, Cap 10%
STEP 4. Any credited interest is added to your chosen interest crediting strategies based on the accumulated value at the end of the year. This means you have the potential to earn compound interest, further growing your cash value. Hypothetical example for illustration purposes only – this does not represent the actual results of the product.
TC139026(0124)3
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