How annual reset changes the math

Important disclosures

Illustration only — not advice.

This is a hypothetical illustration made available for the convenience of licensed financial professionals. It is not investment advice, a recommendation, an opinion, a solicitation, an offer to buy or sell any security or insurance product, or a determination of suitability. The user is solely responsible for the use, accuracy, and any subsequent communication of the output.

How annual reset is modeled.

Each contract year, the index change is measured from the index value at the start of that year to the value at the end (an annual point-to-point method). A positive change is credited up to the cap, after any participation rate. A negative change credits the floor (0% unless changed). The starting point then resets to the new index level for the next year — gains lock in and a decline is never recovered before new credits can be earned.

Hypothetical FIA features.

The cap, participation rate, and floor shown are user-entered hypothetical values selected for illustration. They do not reflect any specific carrier's currently declared rates, contract terms, minimum guarantees, or product availability. Carriers may change rates at the start of each crediting term in accordance with the contract; renewal rates may be lower than initial rates but are subject to contractual minimums described in a product's disclosure document.

Index basis — price return, no dividends.

The S&P 500® line and all FIA credits in this tool use S&P 500® price-index changes and exclude dividends, which is how typical index-credited annuities calculate interest. The optional "S&P with dividends" view applies S&P 500® total return (price change plus reinvested dividends) to the comparison line only; the FIA still credits on price change. A directly held index investment would experience total return.

Index history.

The index now known as the S&P 500® has tracked 500 companies since 1957; figures for years before 1957 reflect the predecessor S&P Composite (roughly 90 companies) and are reconstructed series derived from it. The earliest shown begins with calendar-year 1929 credits (1928 base).

Apples-to-oranges comparison.

A fixed indexed annuity and a directly held index investment are fundamentally different products with different objectives, risks, liquidity, tax treatment, fees, guarantees, and beneficiary options. An FIA is an insurance contract designed for principal protection and long-term, tax-deferred accumulation; an index investment is a securities investment exposed to market risk including loss of principal. This comparison illustrates the volatility-mitigation characteristic of indexed crediting — not that one product is "better" than another.

Modeling simplifications.

Calculations are simplified for illustration. Real contracts and real fund investments may differ materially due to mid-term daily adjustments or interim value calculations, the precise timing of premium receipt and term anniversaries, sales loads, advisory fees, taxes, withdrawals, and other costs not modeled here.

Past performance & guarantees.

Historical S&P 500® returns are sourced from publicly reported data and have not been independently audited. Past performance does not guarantee or indicate future results. Annuity contract and rider guarantees are backed exclusively by the financial strength and claims-paying ability of the issuing insurance carrier; they are not backed by Mach96, any broker-dealer, any bank, or any federal or state government agency, and are not FDIC-insured.

Trademarks.

S&P 500® is a registered trademark of S&P Dow Jones Indices LLC and is used here solely to identify the historical performance benchmark in this comparison. Mach96 is not affiliated with, sponsored by, or endorsed by S&P Dow Jones Indices.