Unlocking the S&P 500 Par Rate: A Closer Look

September 3, 2024

Thinking about a fixed index annuity with an S&P 500® participation rate option? Now might be the perfect time to act before interest rates drop and impact participation and cap rates. According to CNBC, the CME Group’s FedWatch tool predicts the first rate cut could happen as soon as September.1

When it comes to fixed index annuities, the S&P 500® Index participation rate strategy is worth considering. The S&P 500® Index has shown consistent growth over the long haul, with positive average returns in 76% of the years from 1937 to 2023.2 

Some key stats:

  • Current Index Select Annuity 7 S&P 500® Index Participation Rate for $100,000 and up: 60%3
  • Last 10 years’ annual compound returns, assuming a 60% Par rate and 0% floor: 8.01%
  • Required S&P 500® Index Cap Rate to earn the equivalent: 12.10% 

Finding a 12.00% S&P 500® Index Cap Rate in today’s fixed index annuity market can be tough. With market uncertainties and the future growth of the S&P 500® Index unknown, your clients can feel secure knowing they’ll participate in 60% of the S&P 500® Index’s upside without any downside risk. Plus, the Index Select Annuity 7 offers a 5.00% fixed interest crediting option.3 

With over 100 years of financial stability, you can count on us to help your clients prepare for the future. Plus, The Standard is honored to be among one of only eight life and health insurers to achieve an “A” rating or higher from A.M. Best Company since 1928.

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