How Does The Monthly Sum Cap Work?

Shawn Plummer

CEO, The Annuity Expert

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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At The Annuity Expert, we strive to help you make confident financial decisions regarding annuities. Content provided is created by an independent licensed financial professional.

The Annuity Expert is an online insurance agency that provides the widest variety of annuities in the United States. When you buy an annuity directly from us, we receive a predetermined commission from the insurance company (not you). While your annuity is active, clients are not charged any servicing or management fees. Learn more.

Shawn Plummer

CEO, The Annuity Expert

I’ve sold annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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