Equity Indexed Annuity
Definition of "Equity indexed annuity"
Modifications of the single premium deffered annuity, which usually guarantees at a minimum a return of a stipulated amount (usually at least 90% of the single premium accumulated at the annual rate of 3 or 4%). Additional interest can be earned that is linked to an increasing specified stock index. Thus, this insurance product guarantees the principal of the investment (single premium), while at the same time providing the opportunity for increasing values tied to the equities market. Under the standard nonforfeiture law, there must be guaranteed at the minimum 90% of the single premium accumulated at a rate of at least 3% interest per year. The index most often used as a link to this product is the S&P 500. Should the equity index increase, the invested single premium could be credited with a percentage of that increase, typically ranging from 50 to 100% of that increase. These contracts have terms ranging from one to fifteen years and at the end of the term, the owner/ANNUITANT can start a new term or transfer the cash value to another product. Should the contract be terminated before the end of a term, frequently the owner/annuitant forfeits all index gains and will receive only the minimum return guaranteed.
Popular Insurance Terms
Dollar ceiling on a life insurance policy for applicants who are not given a medical examination. The insurer accepts a health questionnaire in the place of a physical examination. At one ...
Company not licensed by a particular state to sell and service insurance policies within that state. ...
Plan that provides a legal resident of the state of Oregon access to basic health care through three major components: Medicaid Reform (rationing) extends Medicaid eligibility to those ...
Cancellation of an insurance policy on the date that policy becomes effective. This type of cancellation does not require any fees to be paid to the insurance company. ...
Model act written and published by the national association of insurance commissioners (naic) whose purpose it is to regulate brokers who control insurance companies. The act permits the ...
Ruling issued in 1988 by the Internal Revenue Service that stipulates that, when computing the pension benefits of an employee still working after 1987, the years of service on the job ...
Individual (s) entitled to receive the income generated by the trust. ...
Unfriendly fire not confined to its normal habitat. For example, fire in the fireplace leaps onto the sofa. Property contracts protect against damage from a hostile fire, not from damage ...
Endorsement to many commercial property insurance policies that covers office equipment. Coverage includes all equipment, whether or not owned by an insured, improvements an insured has ...
Have a question or comment?
We're here to help.