Pulling back the curtain on hybrid indices

August 31, 2023 by Sheryl J. Moore

You need to do your due diligence on hybrid indexes, which are used on indexed life insurance and indexed annuities.

The index provider may limit gains on the index through a monthly cap on performance.

In these instances, there is no cap on downward index performance.

And- this is IN ADDITION TO the limit on indexed performance, achieved through a participation rate, cap rate, or spread rate.

A lot of good a 200% participation rate is, if the index’s growth is limited. -sjm