Renewal Rates

How renewal rates work:

In a Fixed Indexed Annuity (FIA) with a 10-year surrender period (for example), you can choose strategies with shorter crediting periods, such as a 1-year strategy. This means that each year, the interest credited to that strategy is calculated based on the index performance (subject to caps, participation rates, or spreads) for that 1-year term.

A renewal rate is the rate or terms the insurance company sets when a strategy term ends and the strategy rolls over for the next period. For a 1-year strategy, this happens annually. You should expect that the renewal rate each year may change based on current market conditions and the company’s discretion—it is not guaranteed to be the same as the initial rate.

Importantly, renewal rates for existing contracts do not necessarily match the rates offered to new buyers. New contract rates may include promotional terms, higher caps, or other incentives that are not applied to existing contracts. Renewal rates are determined internally by the insurer for your specific contract and may be lower or different than what a new buyer would receive at that same time.

Note: This is not the same as rate history, which simply shows the rates the company offered in previous years. Renewal rates are forward-looking—they determine what your contract will earn in the upcoming term after the initial period.

Note: Annuities Genius does not currently display renewal rates. However, in the illustrator, you can add a section after the Guaranteed and Hypothetical values to demonstrate how the product might perform using an assumed interest rate. This can provide a realistic example of potential outcomes if renewal rates are lower:

This is just for educational purposes.  Please refer to your IMO or the carrier for more details.