Chapter 11. Calculating index changes
“Get your facts first, and then you can distort them as much as you please.” | ||
| --Mark Twain | ||
When determining the profitability of an Equity Indexed Annuity, it is important to consider what particular index will be used to determine your payments. As I have previously indicated, the most popular indexes are the S & P 500 Index, the Dow Jones Industrial Average, the Nasdaq 100, and the Russell 2000 Index. Equally as important to your ultimate goal of earning a profit on your investment is the method used by the issuer of your annuity to determine changes in the index. Although you might not think that this is important, in truth, it is of critical importance to you.
There are three primary methods used by insurance ...
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