Interest is credited and compounded daily to the accumulated value of our deferred annuity contacts. All interest rates are expressed as annual effective yields. This means that the actual, or nominal, rate is lower than the effective yield.

For example, if we state that the current credited rate is 4.5%, we actually use 4.4% to determine the amount of interest to be credited to the contract. But, when the daily equivalent of 4.4% interest is credited and compounded every day throughout the year, the effective yield at the end of the year will be 4.5%, if no withdrawals are made during that time.

The companies determine current interest rates from time to time that will be applicable to contracts currently being issued. However, once a contract is issued, the rates to be used for determining values on that contract are those that were in effect at the time the contract was issued and are guaranteed for the length of the term.

After the initial rate guarantee period has expired, the companies will determine a rate to be credited to the contract for the following contract year. In no event will this rate be less than the minimum guaranteed interest rate specified in the contract.