A. Below is a list of questions you should ask when evaluating index annuities:
- What is the guaranteed minimum interest rate?
- What charges, if any, are deducted from purchase payments?
- What charges, if any, are deducted from the contract value?
- What is the death benefit?
- How long is the term? What options are available at the end of the term?
- What is the participation rate? For how long is it guaranteed? Is there a minimum?
- Does the contract apply rate caps to determine the amount of interest credited? What is the company's history of rate cap renewal?
- What rate crediting strategy or indexing method is used to determine the amount of index credited?
- What index is used as the performance benchmark?
- Is there a margin, spread, or administrative fee? Is that in addition to or instead of participation rate?
- What surrender charges or penalties apply to full surrender or periodic contract withdrawals?
- Does the contract have vesting provisions? What are the terms that apply?
- Are there surrender or withdrawal charges waived for confinement to a nursing home or other reasons?
- What annuity income payment options are available?