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 ?
I'll still accomplish this by showing my clients all three kinds of annuities: traditional fixed rate, variable, and the newest version of an equity index annuity called BPA.
15 /PRNewswire/ -- A new alliance in the fixed annuity market releases its first jointly developed product today -- AmeriMark(SM), an equity index annuity (EIA) that gives clients the opportunity to capture the S&P 500(R)'s best year in a three-year period.
Equity Index Annuity Sales Sales zoomed ahead by more than 80% in 2002, reaching nearly $12 billion, about $5.
In response to this dilemma, the insurance industry has created the Equity Index Annuity (EIA) that allows the investor to share in market increases as the market rises, but avoids the possibility that the investor will suffer losses in a "down market" environment such as we've witnessed over the past couple of years.
It is important to have independent tools that the public can rely upon in learning about and making a determination if an equity index annuity is the right strategy for some of their hard earned savings.
Other key challenges include maintaining profitability given the company's shift toward lower margin variable annuities and replacing revenue lost from declining equity-index sales, either by rejuvenating equity index annuity sales or growing variable annuity sales.
Best does not expect all major equity index annuity writers to have their outlooks changed.
Keyport Life Insurance Company, with over $15 billion in assets, is a leading provider of fixed, variable and equity index annuity products.
Fitch observes that many of AEL products are designed with features to reduce lapses in its annuity book of business and that its equity index annuity products have adequate hedge management.
In addition, because of the growth in the traditional life and equity index annuity products, the company issued two surplus notes for a total of $20 million to maintain risk-adjusted capital strength ratios at historical levels.
Farmers Insurance is pleased to announce the addition of the Farmers Equity Index Annuity (FEIA) to The Advantage Group's Advantage Honor Roll.
Allianz Life Insurance Company of North America (Allianz Life), a leading wealth management company, today announced that it was named the leading equity index annuity (EIA) carrier of 2000, in terms of sales volume, by St.