If you are, all of the following terms should be easily understood. Crediting method, annual reset, cap, spread, monthly averaging, daily averaging, monthly cap, participation rate, point to point, two tier annuity, annuitization requirement, 1 year performance, high water mark, waivers, free withdrawal, death benefit, annual lock-in, minimum guarantee, and surrender schedule.

Some EIA's have several of the above features working in the same crediting method. This can reduce the client overall return when compared to a similar crediting method with only one feature limiting the overall performance of an EIA. For a quick example, if a product has a monthly or daily averaging crediting method it should not be capped since the same averaging crediting methods exist with company and have no cap.

I have talked to agents that have never sold an EIA because they feel EIA's are too complicated. For these agents we have a simple index design that is easy to understand. Here is how it works: If the S&P is not down the client gets 7.25% on an annual reset and lock in basis! Again: If the S&P is even or up client gets 7.25%! Easy enough?

If you have questions about the EIA you are selling, give me a call and I would be happy to review the contract and crediting method with you.