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
Same as term Credit Card Insurance: coverage under a homeowners insurance policy in the event that a credit card is fraudulently used or altered. Fraud includes theft and the unauthorized ...
Adjustment in property insurance to reflect increased construction costs. ...
Additional amount of surplus from an additional amount of capital necessary to act as a supplement to the cash flow in the event unforeseen contingencies occur that disrupt or impair the ...
Coverage in the event a safe of a business is forceably entered, either on or off the premises, and property is stolen from the safe. Also covered is damage to the premises during actual or ...
Rule adopted by the financial accounting standards board that requires that obligations owed to re-insurers under multiyear insurance contracts must be reported as liabilities by the ceding ...
Endorsement to a property insurance policy providing all risks coverage for insured property. Excluded properties include residences, farms, and manufacturing properties. This endorsement ...
Total premiums generated from all policies written by an insurance company within a given period of time. ...
Provision in a life insurance policy that protects its proceeds from the beneficiary's creditors. On payment, the beneficiary loses the protection of the spendthrift trust clause and the ...
Element used to adjust losses to reflect the incurred but not reported claim (IBNR) under the retrospective method of rating. ...
Have a question or comment?
We're here to help.