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
Government health care program in several European countries that has been proposed in various forms for the U.S., to be administered by the federal government. Plan A would cover all U.S. ...
Condition for inland marine liability insurance coverage that states a loss or claim must occur in the policy territory. Policy territory for a liability policy includes the U.S., its ...
Form that covers exposures associated with efforts to operate a business that is damaged by a peril such as fire. For example, a special electrical generator may have to be purchased in the ...
Part of the Balanced Budget Act of 1997 that permits medicare recipients to select coverage among various private health care plans to include HMOS, PPOS, POINT-of-SERVICE (POS), MEDICAL ...
Provision in insurance policies that states the deductible. ...
Person for whom the trust was created and who receives the benefits thereof. In many instances a trust is established to prevent the careless exhaustion of an estate. For example, the ...
act that prohibits employers from requiring employees to retire at age 70. Also, the act prohibits EMPLOYEE BENEFIT PLANS from discriminating against employees in the 40 to 70 age group ...
Coverage for a shipper (owner/sender) for property damage or loss of goods in transit through the post office. A trip transit insurance policy specifically excludes coverages on property ...
tort against another person's property, designed to detain or dispose of it in a wrongful manner. For example, wrongful selling of another person's automobile without permission would ...
Have a question or comment?
We're here to help.