Indexed Annuities: What Are Performance Trigger Strategies?
Some index annuities, like National Life Group’s flexible premium and single premium indexed annuities, offer a performance trigger index crediting strategy.
Key things to know about performance trigger strategies and indexed annuities:
- The potential growth of the cash value of an indexed annuity is based on the performance of a market index like the S&P 500.
- Indexed annuities aren't directly invested in a market index.
- You typically have a choice of multiple crediting strategies. One option may be a performance trigger strategy.
- The performance trigger strategy will credit a fixed interest even if the market value growth is 0.00%.
What does it mean that cash value growth is based on index performance?
The potential growth of an indexed annuity is typically based on the performance of a market index in a given period (usually over a one- or two-year period).
How does the performance trigger strategy work?
With the performance trigger crediting strategy, your policy is credited based on a fixed interest rate if the change is not negative. For example, if the performance trigger rate is 5.00%, you’d get credited 5.00% as long as the value of the index did not decrease.
If the market index value went down, you will be credited 0.00%. So, you will never lose a penny of your deposits and earned interest — any gains are locked in. You can never lose interest previously credited.
I have a National Life Group indexed annuity. Can I change strategies?
Yes, you can change index strategies at any time. Your new strategies will take effect at the beginning of the next crediting period. You can change your allocations using the National Life Group customer portal or via our app.
DOWNLOAD THE CUSTOMER APP
Next steps:
- Learn more about indexed annuities and index crediting.
- Find out what is best for you and your unique situation: Work with your agent or a financial/tax professional.