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Define: Annual Crediting Cap

Annual Crediting Cap

An annual crediting cap is the maximum interest rate that an equity indexed annuity can be credited in a year. The contract has a maximum upper limit in which the annuity can gain. For example, if the cap is 6 percent and the index tied to the annuity increased 6.5 percent, only the 6 percent would be credited to the annuity.

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