In an indexed annuity, the 'participation rate' determines:
Explanation
The participation rate sets what portion of the linked index's gain is used to credit interest; for example, an 80 percent participation rate credits 80 percent of the index's increase (before any cap). It is not the surrender charge, the producer's commission, or the required starting age. Along with the cap and floor, the participation rate is one of the levers that shapes how much index growth an indexed annuity actually pays the owner.
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Related questions on this topic
- During the accumulation phase of a variable annuity, the owner's payments purchase:
- During the payout phase of a variable annuity, the number of annuity units is generally fixed, yet the payment amount varies because:
- An equity-indexed (fixed indexed) annuity protects the owner against index losses by providing:
- The 'life with period certain' annuity payout option pays income:
- Under a 'cash refund' life annuity option, if the annuitant dies before receiving payments equal to the amount paid in, the beneficiary receives:
- A 'joint and survivor' annuity continues payments:
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