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
Periodic payments to an injured person or survivor for a determinable number of years or for life typically in settlement of a claim under a liability policy. Terms may include immediate ...
Risk management control device used to minimize accidents and injuries to employees resulting from an unsafe working environment. For example, potential cumulative trauma disorders losses ...
Law that established rules and regulations to govern private pension plans, including vesting requirements, funding mechanisms, and general plan design and descriptions. For example, three ...
Insurance that usually follows the format of comprehensive health insurance plans in that there is a coinsurance requirement of usually 75 to 80%, and a limit on benefits for any one person ...
Fixed or stated amount of interest paid by a security expressed as a percent of the par value of the security. The longer the length of time until maturity, the higher the coupon rate to ...
Income paid to a worker who is temporarily disabled by an injury or sickness that is not work related. Compare with workers compensation benefits, which are available only to workers ...
Model state law of the NAIC that stipulates that the purchaser (debtor) of a credit life insurance (creditor life insurance) policy must be provided a descriptive policy; the policy must ...
Injury covered under workers compensation insurance. For every part of the body that may be injured, there is a listed financial sum that will be paid. For example, a right severed index ...
Insurance policy underwritten and issued by a syndicate listing each risk insured by each syndicate member. ...
Have a question or comment?
We're here to help.