The monthly point-to-point index change is determined by



subtracting the prior month’s index value from current

month’s index value and dividing it by the prior month’s

index value. If this results in a positive monthly point-to-point

index change and is not more than the declared cap, then it is

used as the capped index change for that month. If it is more than

the declared cap, then we use the declared cap as the capped index

change for that month.

A negative monthly point-to-point index change is not subject

to a cap.

A “capped index change" for each month is captured over a

12-month period. The sum of the 12 monthly “capped index

changes" will be the index credit rate on the index crediting

date. The index credit rate is multiplied by the option’s account

value to determine the index credit.

One-Year Annual Point-to-Point

The annual point-to-point index change is determined by subtracting

the prior year’s index value from the current year’s index value and dividing

it by the prior year’s index value. If this results in a positive annual point-to-point

index change and is not more than the declared cap, then it is used as the

index change for that year. If it is more than the declared cap, then we use

the declared cap as the index change for that year.

A negative annual point-to-point index change is not subject to a cap.

The index change will be the index credit rate on the index crediting

date. The index credit rate is multiplied by the option’s account value

to determine the index credit.

Participation Rate

The participation rate may very greatly from one annuity to another

and from time to time within a particular annuity. Therefore, it is

important for you to know how your annuity’s participation rate

works with the indexing method. A high participation rate may be

offset by other features, such as simple interest, averaging, or a

point-to-point indexing method. On the other hand, an insurance

company may offset a lower participation rate by also offering a

feature such as an annual reset indexing method.

Annual Point-to-Point

The index-linked interest, if any, is based on the difference

between the index value at the end of the one year term and

the index value at the start of the one year term. Interest is

added to your annuity at the end of the one year annual

reset term.

Jeff McLeod is a fixed index-linked retirement income annuity specialist.

To get a copy of the Buyer’s Guide visit http://HappyRetiree.com/

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