EQUITYINDEXED ANNUITIES
Equityindexed annuities offer investors a return that varies according to the performance of a set index, such as the S&P 500. Equityindexed annuities will credit additional interest to the investor's account based on the contract's participation rate. If a contract sets the participation rate at 70 percent of the return for the S&P 500 index, and the index returns 5 percent, the investor's account will be credited for 70 percent of the return, or 3.5 percent. Equity index annuities may also set a floor rate and a cap rate for the contract. The floor rate is the minimum interest rate that will be credited to the investor's account. The floor rate may be zero or it may be a positive number depending on the specific contract. The contract's cap rate is the maximum rate that will be credited to the contract. If the return of the index exceeds the cap rate, the investor's account will only be credited up to the cap rate. If the S&P 500 index returns 11 percent and the cap rate set in the contract is 9 percent, the investor's account will only be credited 9 percent.
Fixed Annuity 
Variable Annuity 

Payment received 
Guaranteed/fixed 
May vary in amount 
Return 
Guaranteed minimum 
No guarantee/return may vary in amount 
Investment risk 
Assumed by insurance company 
Assumed by investor 
Portfolio 
Real estate, mortgages, and fixedincome securities 
Stocks, bonds, or mutual fund shares 
Portfolio held in 
General account 
Separate account 
Inflation 
Subject to inflation risk 
Resistant to inflation 
Representative registration 
Insurance license 
Insurance and securities license 
ANNUITY PURCHASE OPTIONS
An investor may purchase an annuity contract in one of three ways:
• Singlepayment deferred annuity
• Singlepayment immediate annuity
• Periodicpayment deferred annuity
SINGLEPAYMENT DEFERRED ANNUITY
With a singlepayment deferred annuity, the investor funds the contract completely with one payment and defers receiving payments from the contract until some point in the future, usually after retirement. Money being invested in a singlepayment deferred annuity is used to purchase accumulation units. The number and value of the accumulation units varies as the distributions are reinvested and the value of the separate account's portfolio changes.
SINGLEPAYMENT IMMEDIATE ANNUITY
With a singlepayment immediate annuity, the investor funds the contract completely with one payment and begins receiving payments from the contract immediately, normally within 60 days. The money that is invested in a singlepayment immediate annuity is used to purchase annuity units. The number of annuity units remains fixed and the value changes as the value of the securities in the separate account's portfolio fluctuates.
PERIODICPAYMENT DEFERRED ANNUITY
With a periodicpayment annuity, the investor purchases the annuity by making regularly scheduled payments into the contract. This is known as the accumulation stage. During the accumulation stage, the terms are flexible and, if the investor misses a payment, there is no penalty. The money invested in a periodic payment deferred annuity is used to purchase accumulation units. The number and value of the accumulation units fluctuate with the securities in the separate portfolio.