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
Quality of investments of insurance companies. State insurance regulators establish rules for company investments. Authorized investments vary, depending on whether a company is a life ...
Percentage of life insurance or other insurance policies remaining in force; percentage of policies that have not lapsed. The higher the percentage, the greater the persistency. Since it is ...
In ocean marine insurance, provision stipulating that upon the collision of two or more ships, when all ships are at fault, all owners and shippers having monetary interests in the voyage ...
Three types of damages can be awarded to a plaintiff: Special Damages reimbursement for out-of-pocket expenses, including medical bills, legal charges, cost of repairing damaged or ...
Coverage usually provided as part of the special Multiperil insurance (smp) policy, generally replaced by the commercial package policy, through the attachment of the Blanket Crime ...
Organization of brokers and securities dealers in the over-the-counter market operating under the auspices of the Securities and Exchange Commission (SEC). Its purpose is to enforce, on a ...
Feature of property and casualty policy providing coverage without a reduction in the policy's limits after a loss is paid. For example, if the limit of coverage under a property policy is ...
Typical non qualified plans of life insurance for key employees include: permanent life insurance dividends generated by the policy are used to pay the income tax of the key employee that ...
Transportation firm that carries only select customers' goods and is not obligated to carry any particular customer's goods even if that customer is willing to pay. Contrast with common ...
Have a question or comment?
We're here to help.