Abstract
While the new equity index fixed annuities now in the market use many different index methods, 3 different types have risen to the top as most prominent. These methods are the High Water Look Back method, the Annual Point To Point method, and the Daily Average method. Equity index annuities use either an Annual Return or Total Return method in the calculation of the index value. Annual return methods calculate an interest return every contract year and combine these returns to determine the total ending return. Total return methods use only one calculation to determine the ending return. The annual point to point and the daily average methods are an example of the annual return type, while the high water look back method utilizes a total return approach.