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Hybrid Index Annuity

Hybrid Annuity - Monthly Index Change - Monthly Point to Point - Monthly Sum - Interest is credited each Contract Anniversary based on the sum of the month-to-month changes in the Index, where the positive percentage changes in each month are limited to a predetermined percentage called the monthly index cap.

Interest on the Account Value is linked in part to the Index. (The index does not include dividends that may be paid on the stocks making up the index.) Indexed Interest is not earned or credited until the Policy Anniversary. Until the Policy Year is over and the necessary 12 monthly Index Values are available, the formula cannot be calculated.

The annual monthly index cap is declared in advance and is Guaranteed for the entire Contract Year, but will never be less than the minimum guaranteed index cap described in the index annuity contract.

Monthly Index Change Rate - The calculation of the percentage change, either positive or negative, is monthly from Index Date to Index Date. The Index Date is the last day of each monthly period beginning on the policy Date and the same day of each month thereafter.

Monthly Index Cap Rate - The interest rate will be the sum of monthly percentage increase and decreases in the index, but the rate credited will not be less than zero (0%). Any single monthly increase will be limited to no greater than the Monthly Index Cap Rate, declared in advance annually. The Monthly Index Cap Rate will never be less than a minimum guaranteed rate, usually 1%. The interest is credited annually on the Policy Anniversary to the Account Value at the beginning of that Policy Year.

Annual Reset (Ratchet) - The Index interest earned, if any, is calculated from the beginning Index Value for each policy year, whether higher or lower than the previous policy year. All indexed interest is credited annually and locked-in. Future decreases in the Index will never reduce your financial outlay. 

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JEFFREY SCOTT McLEOD
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