With fixed indexed annuities the contract return is the greater of a an annual minimum rate or b the return of a stock market index such as the s p 500 reduced by certain expenses and formulas. In a fixed indexed annuity the floor is expressed as a guaranteed minimum interest rate this floor is usually set at at an annual rate of 0 meaning that even if the index decreases in value the interest to be credited won t be negative. Some index based financial products have a floor or the maximum value you would lose if the index went down.
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