Question

The interest credited to an equity indexed annuity is tied to increases in?

A) a specific equity or stock index.
B) a specific stock.
C) home equity.
D) debt ratio.

Answer 1

The interest credited to an equity indexed annuity is tied to increases in a specific equity or stock index.

Step-by-step explanation:

The interest credited to an equity indexed annuity is tied to increases in a specific equity or stock index.

Equity indexed annuities are a type of insurance product that provide a guaranteed minimum return along with the potential for additional interest based on the performance of a specific stock index. This means that when the stock index increases, the interest credited to the annuity will also increase.

For example, if an annuity is tied to the S&P 500 index and the index increases by 10%, the annuity may credit an additional 5% interest to the policyholder.