Indexed Life Crediting Methods

Summary

Indexed life is often compared to indexed annuities from a product perspective. The two lines of business do share some commonalities including the indices that are utilized for crediting interest and the terminology that is used when discussing the products. Although the indexed crediting calculations are the same between both lines, indexed life has approximately ten different crediting methods and indexed annuities have more than twice that. Both product lines offer their clients minimum guaranteed cash values and death benefits. Perhaps the most attractive feature that draws consumers to indexed life and indexed annuities is their principal protection feature the policyholder is guaranteed not to lose cash values due to a decline in the index. This is a strong value proposition for someone who may have experienced a loss of their savings or investments just after the turn of the century.