Understanding Monthly Sum Cap Crediting in Simple Terms
An indexed annuity is a type of financial product that lets your money grow based on how a stock market index (like the S&P 500) performs. But here’s the kicker: even if the market takes a dive, you don’t lose your original contribution. That makes it a popular choice for people looking to protect their retirement savings while still having a shot at earning interest.
Monthly Sum Cap crediting is one way indexed annuities can calculate the interest you earn.
Here’s how it works—
- Each month, if the index goes up, you earn interest—up to a fixed maximum (the “cap”).
- If the index goes down, a negative number is counted—but it doesn’t reduce your policy value.
- At the end of the year, all 12 months’ interest (positive and negative) are added up.
If the total is positive, that’s the interest you get for the year.
If it’s negative, you get 0%—but you don’t lose any of your money.
Bottom line—
You’re protected from losing money due to market downturns, but you still have growth potential when the market goes up. That’s a win-win.
If you’re looking for a smarter way to grow your money—without riding the rollercoaster of the stock market—an indexed annuity with Monthly Sum Cap Crediting could be the solution for you.
See the example below for hypothetical results.
For more information, contact your local Agent or National Life Group.
“Standard & Poor’s®”, “S&P®”, “S&P 500®”, and “Standard & Poor’s 500™” are trademarks of Standard & Poor’s and have been licensed for use by National Life Insurance Company and Life Insurance Company of the Southwest. This Product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representations regarding the advisability of investing in the Product. The S&P Composite Index of 500 stocks (S&P 500®) is a group of unmanaged securities widely regarded by investors to be representative of large company stocks in general. An investment cannot be made directly into an index.
The 0% floor provided by an indexed annuity ensures that during crediting periods where the index is negative, that no less than 0% interest is credited to the index strategy. This means that premiums paid and interest earned will not be reduced by market volatility. Rider charges continue to be deducted regardless of whether interest is credited. Indexed annuities do not directly participate in any stock or equity investments. This is not a solicitation of any specific annuity contract. Guarantees are dependent upon the claims-paying ability of the issuing company. Assuming no withdrawals made during the surrender charge period and no rider charges.
TC8034168(0625)3
