equity-indexed annuity

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Equity-Indexed Annuity

An annuity with an interest rate linked to the performance of an equity index. Most annuities pay the interest rate stated in the contract, but an equity-indexed annuity pays a minimum interest rate, with the possibility of a higher rate depending on the performance of the relevant stock or equity index. Each plan uses a different methodology in determining how the higher interest rate is calculated. Common features in its calculation include a participation rate, which determines how much of the annuity is linked to the index, and the rate cap, which sets a maximum interest rate on some plans. Many equity-index annuities use the Standard & Poor's 500 Composite Stock Price Index (S&P 500) as their benchmark.

equity-indexed annuity

A contract with an insurance company that promises periodic payments keyed in a specified manner to a stock market index. Unlike variable annuities, equity-indexed annuities specify a guaranteed minimum return that is typically 3%. These contracts may also specify an upper limit (cap) on the return that is paid. Indexing methods vary, and surrender charges often apply to early withdrawals.
References in periodicals archive ?
According to Huddleston, abuse of retired workers is an epidemic and often involves variable annuities or equity indexed annuities, which, he says, are often unsuitable for people entering retirement.
The "fixed account" in most equity indexed annuities currently yield near 1.
Plewes: I've started using a segmented income planning strategy for my clients, which accommodates SPIAs, deferred annuities, variable and equity indexed annuities, as well as managed money accounts, to help my clients and prospects maximize their income with inflation adjustment.
Ranging from the Suze Ormans of the world to the Dateline NBC expose on equity indexed annuities that aired in the spring of 2008, we-and, more importantly, our clients and prospects--are constantly bombarded by self-appointed experts who pretend to understand the complexity of an array of financial products.
The staff of the department said Crawford had advised four Arkansas residents to sell some or all of their securities and invest in equity indexed annuities he sold.
The National Association of Securities Dealers' 05-50 Notice to Members in August 2005 has had a "chilling effect" on sales of equity indexed annuities, as well as product design.
Athene Annuity is a wholly owned subsidiary of Athene Holding, a life insurance holding company focused principally on the retirement market and whose business, through its subsidiaries, is focused primarily on issuing and reinsuring fixed and equity indexed annuities and writing funding agreements and funding agreement-backed notes.
A strong proponent of equity indexed annuities back in the early and mid-1990s when they were still a relatively new product, Hamlin, CEO and founder of Somerset Wealth strategies in Portland, ore.
Top 10 Carriers, 2005, Equity Indexed Annuities Based on sales and market share: 2005 Sales Market Companies ($ Billions) Share (%) Allianz Life $8.
8 /PRNewswire-FirstCall/ -- Responding to the requests of financial consultants, Sun Life Financial has launched a CD-ROM to arm producers with the tools to educate their clients on the features and benefits of equity indexed annuities (EIA) as well as the importance of retirement planning.
Athene Holding is a life insurance holding company focused principally on the retirement market and whose business, through its subsidiaries, is focused primarily on issuing and reinsuring fixed and equity indexed annuities and writing funding agreements and funding agreement-backed notes.
Equity indexed annuities "are the only product(s) that (have) intermediate term guarantees," he said