Annual Crediting Cap

Definition

  • An annual (yearly) limit on what can be credited to an equity-indexed annuity.

Synonyms
yearly crediting cap, credit cap

Related Terms and Acronyms

  • Annuity Table Definition,
    • A table that can be used to find the future value of an annuity.
  • Cap Definition,
    • A limit imposed on an item.
    • The top limit on the amount the interest rate can increase during a single time period of an adjustable-rate mortgage. Every ARM has two caps: a periodic cap, which limits the periodic changes to the interest allowed in the loan agreement, and a lifetime cap, which governs the total increase that can be imposed during the life of the loan.
  • Indexed Annuity Definition,
    • An annuity where investment performance is pegged to a stock index.
  • Interest Rate Cap Definition,
    • A limit to the interest rate increases and decreases on an adjustable rate loan; either from one adjustment period to the next or over the life of the loan.
  • Participation Rate Definition,
    • The rate at which changes in a stock index affect the profit credited to an annuity.
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