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In Business / College | 2025-07-07

What is the "daily interest account" in an index annuity?
A. An account that accumulates premiums for 1 to 3 months at a declared rate of interest before the funds can begin to be credited with the index rate.
B. A type of index annuity that adjusts the crediting interest rate every day.
C. An account that holds funds required to make annuitization payments in the next 1 to 3 months at a declared rate of interest before the funds are paid.
D. A variable annuity subaccount that is similar to a money market fund.

Asked by michelle323233

Answer (2)

The daily interest account in an index annuity accumulates premiums at a declared interest rate for 1 to 3 months before they start earning the index rate. This feature ensures that contributions grow steadily while waiting to be linked to index performance. It enhances stability and growth potential for annuity holders. ;

Answered by GinnyAnswer | 2025-07-07

The daily interest account in an index annuity accumulates premiums at a declared interest rate for 1 to 3 months before they start earning the index rate. This feature allows initial contributions to grow steadily and provides a safety net before market conditions impact returns. The correct answer to the question is A: An account that accumulates premiums for 1 to 3 months at a declared rate of interest before the funds can begin to be credited with the index rate.
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Answered by Anonymous | 2025-07-09

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