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 ?
In this article, we introduce a premium principle for equity-indexed annuities (EIAs).
Excluding the change in valuation of option contracts supporting equity-indexed annuities, investment income increased $33.
Bipartisan legislation would reverse a Securities and Exchange Commission decision to regulate equity-indexed annuities as securities.
Examples include real estate and inflation-protected securities (good) and leveraged funds and equity-indexed annuities (ugly).
The Securities Department must refer such complaints to the Arkansas Insurance Department, which regulates variable and equity-indexed annuities.
SLCG") has issued the first of two studies of equity-indexed annuities.
Securities & Exchange Commission's proposed rule that could redefine many equity-indexed annuities as securities.
Principal Financial discontinued sales of equity-indexed annuities in October 2008 because "there was not significant demand through our career distribution channel," spokeswoman Terri Hale said.
Founded in 1965, Oxford Life Insurance Company specializes in providing life insurance, fixed and equity-indexed annuities, and critical-illness insurance sold through independent marketing organizations and general agents.
West, 82 years old, and alleges deceptive and predatory marketing and sales practices scheme involving equity-indexed annuities, fixed annuities and financial planning targeting senior citizens in the State of California.
While the returns of fixed annuities are set at inception, and those of variable annuities fluctuate with investment returns, equity-indexed annuities typically guarantee a certain amount of principal protected from losses.
Summary of Consolidated Operating Results (In thousands except per share data) Three Months Ended Years Ended December 31, December 31, 2001 2000 2001 2000 Revenues: Revenues, excluding realized investment losses and index options $ 85,478 86,622 343,691 344,225 Index options 1,345 (11,751) (13,539) (32,268) Realized losses on investments (15,364) (12,706) (27,046) (19,242) Total revenues $ 71,459 62,165 303,106 292,715 Earnings: Earnings from operations $ 25,751 7,867 62,165 41,048 Net realized losses on investments (9,987) (8,259) (17,580) (12,508) Cumulative effect of change in accounting for equity-indexed annuities 2,134 Net earnings (loss) $ 15,764 (392) 46,719 28,540 Basic Earnings Per Share: Earnings from operations $ 7.