Monthly Sum Cap is also known as the “Monthly Point-to-Point.” It is a unique interest crediting strategy for indexed annuities that offers strong interest potential during market upturns but protects your premiums paid and interest earned from loss due to market downturns.
Each month where the index increases relative to the prior calendar month, an interest rate (up to the monthly cap) is assigned to the current month.
In any month where the index decreases relative to the prior calendar month, a negative interest rate is assigned to the current month.
There is no floor for monthly negative interest assignments.
At the end of a 12 month period, the interest assigned to each month (both positive and negative) is summed to determine annual credited interest.
When the total of the assigned interest rates for the 12 month period is positive, that interest rate is credited to the policy.
If the total of the assigned interest rates is negative for the 12 month period, you’ll receive 0% interest for the year, but you’ll never lose a penny of your premiums paid and interest credited.
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