Page 36 - Life Assurance

* Mortality and expense risk charge. This
fee, called the “M&E” fee, pays for (1) the
mortality risk associated with the guaranteed
death benefit and excessive longevity; (2) a
guarantee that annual expenses will not exceed
a certain percentage of assets after the contract
is issued; and (3) an allowance for profit.

* Surrender charge. Most annuities have a
surrender charge if the annuity is surrendered
during the early years of the contract. This
charge helps to pay agents and brokers who sell
variable annuities.

3- Equity- indexed Annuity:

An equity-indexed annuity is a newer type of
annuity that offers the guarantees of a fixed
annuity and limited participation in stock market
gains. An equity-indexed is a fixed, deferred
annuity that allows the annuity owner to
participate in the growth of the stock market and
also provides downside protection against the
loss of principal and prior interest earnings if the
annuity is held to term.

Individual Retirement Accounts

An individual retirement account (IRA)
allows workers to make annual contributions to
a retirement plan up to certain limits.

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