Buffered Annuities Sample Clauses
A Buffered Annuities clause defines the terms under which an annuity product provides a level of downside protection against market losses, typically by absorbing a specified percentage of losses up to a certain limit. In practice, this means that if the underlying investment index declines, the insurer will cover losses up to the buffer amount (for example, the first 10% of losses), while the annuity holder is responsible for any losses beyond that threshold. This clause is designed to offer investors a balance between growth potential and risk mitigation, addressing the need for partial protection in volatile markets while still allowing for some exposure to market gains.
Buffered Annuities. The performance of a buffered annuity is linked to the performance of a market index; however, your participation in any gain experienced by the index will be limited to the percentage of the gain set by the insurance company. This limits your upside potential while the insurance company helps to protect your annuity value from market volatility.