Paramos

The participation rate decides how much of the increase in the index will be used to calculate index-linked interest. For example, if the calculated change in the index is 10% and the indexed annuity participation rate is 80%, the index-linked interest rate for your fixed index annuity will be 8% (10% x 80% = 8%). A company may set a different participation rate for newly issued index annuities as often as each day. Therefore, the initial participation rate in your fixed annuity will depend on when it is issued by the company. The company usually guarantees the participation rate for a specific period (from one year to the entire term). When that period is over, the company sets a new participation rate for the next period.