Know which value is growing.
A growth rate is meaningful only when you know which value it applies to. A contract may track several values for different purposes, and they may change under different rules.
Fixed credited interest
Some fixed annuities state an interest rate for a specified period. Confirm when that period ends, what may change at renewal, and which minimum guarantees continue. A rate for one period is not a promise of the same rate for the rest of retirement.
Indexed interest crediting
A fixed indexed annuity may credit interest using an index-linked formula with caps, participation rates, spreads, or other terms. The contract does not directly invest in the index. A crediting floor does not mean every possible withdrawal or surrender preserves the original premium after charges and adjustments.
Account value and surrender value
Account value reflects the contract’s crediting and deductions. Cash surrender value is the amount available when ending the contract under its terms. Surrender charges and other adjustments may make these amounts different.
Income benefit base
An income rider may use a separate calculation value to determine eligible payments. A roll-up on that value is not necessarily growth in money available as a lump sum. A withdrawal percentage is not automatically an investment yield.
Questions before comparing rates
Ask which value grows, whether the formula is simple or compound, how long the provision lasts, and what withdrawals do to it. Review rider charges, age requirements, joint-life options, payout conditions, and insurer claims-paying ability. Use the actual policy and rider rather than a headline rate.
This page supplies no current product rates, projections, or numerical illustrations.
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Related education
General education only. Insurance availability, features, costs, and benefits depend on applicable rules, underwriting, and contract terms. Tax, legal, and investment decisions require appropriately qualified professionals. Annuity guarantees depend on the issuing insurer’s claims-paying ability and contract terms.