AnnuityVoice Methodology

What's a RILA?

A registered index-linked annuity (RILA) is an insurance contract that ties your account's growth to a stock-market index — like the S&P 500 — but with two guard-rails the insurance company sets:

• A cap or participation rate on the upside, meaning the insurer keeps a piece of any market gain (e.g. you get the index return up to a 9% cap, or 80% of whatever the index does).
• A buffer or floor on the downside, meaning the insurer absorbs some of the losses if the market falls (e.g. a 10% buffer means the first 10% of any drop is on them; you only lose what's beyond that).

You give up some upside and the insurer takes on some downside — that's the trade. RILAs sit in the middle of the annuity spectrum: more growth potential than a fixed annuity, more protection than a variable annuity (which has no buffer at all). A typical RILA buyer is in their 60s, has $250K–$1M in retirement savings, and is looking for stock-market exposure with a safety net as they transition into retirement.

What does each letter grade mean?

We rate every RILA on the market against the same standardized scenario (a 60-year-old buyer, $250,000 premium, 30-year horizon). The grade reflects how the contract performs on that one apples-to-apples test — not advice for your specific situation.

How we score, in plain English

Every contract is scored on four things that go into the grade, plus one shown only for transparency:

• 💰 Net Value (80% of the grade) — how much wealth this contract actually builds for you, after fees. This blends two things: the expected growth in your account (using a 5,000-scenario simulation), and the value of any income or downside-protection guarantees that come with it.
• 🔒 Surrender Flexibility (6.67%) — how easily you can get your money out if you need it. Shorter surrender period, bigger free-withdrawal corridor, more hardship waivers all push this score up.
• 🏢 Insurer Strength (6.67%) — how likely the carrier is to pay claims 10–20 years out. AM Best rating, adjusted for ownership structure and balance-sheet transparency.
• ⚖️ Fair Dealing (6.67%) — has this carrier treated existing policyholders fairly over time? Cap-rate-cut history, illustration-vs-actual delta, complaint index.
• Annual fee (informational only, not scored) — the sticker price the rate sheet charges. Reported for transparency; the actual cost is already reflected inside Net Value, so we don't count fees twice.

We take no money from carriers, no affiliate commissions, no lead-gen revenue. The grades and the methodology are open and reproducible — anyone with the product spec, the methodology version, and the random seed can re-derive any grade themselves.

Want the actuarial detail behind any of this? → Methodology Overview

Glossary

Hover any underlined acronym anywhere on the site to see the definition inline. The list below is scoped to the active tab — every term that appears on the public site, grouped together.

GMWB

Guaranteed Minimum Withdrawal Benefit — a variable-annuity rider that guarantees a fixed annual withdrawal amount (a percentage of the benefit base) for life, even after the account value is depleted.

GLWB

Guaranteed Lifetime Withdrawal Benefit — an optional rider that pays the policyholder a fixed annual withdrawal amount for life, even after the account value is depleted. Functionally similar to GMWB; "GLWB" is more common on indexed and registered index-linked annuities.

GMDB

Guaranteed Minimum Death Benefit — pays beneficiaries the greater of the account value or the benefit base (a contractually defined floor) at death.

M&E

Mortality & Expense fee — annual base-contract charge as a percentage of account value, covering insurance risk and administrative cost.

buffer

Buffer — the insurer absorbs index losses up to a stated percentage (e.g. 10%); losses beyond the buffer pass to the policyholder.

floor

Floor — the insurer absorbs all losses beyond a stated negative percentage (e.g. losses worse than -10% are absorbed); upside is typically capped or spread-reduced.

cap rate

Cap rate — the maximum index credit the policyholder can receive in a segment period (e.g. 10% cap means upside above 10% is forfeited).

participation rate

Participation rate — the percentage of index gain credited to the policyholder (e.g. 90% participation on a 10% index gain credits 9%).

spread

Spread — a fixed deduction from the index return before crediting (e.g. a 2% spread on a 10% index return credits 8%).

trigger

Trigger rate — a fixed credit paid if the index return is at or above zero (or any positive threshold); zero crediting otherwise.

surrender period

Surrender period — the number of years during which withdrawals above the free corridor incur a contingent deferred sales charge.

free-withdrawal corridor

Free-withdrawal corridor — the annual percentage of account value (typically 10%) that can be withdrawn without triggering a surrender charge.

AM Best

AM Best — an independent credit rating agency specialising in the insurance industry; ratings range from A++ (Superior) to D (Poor).

Scale G2

Scale G2 — the Society of Actuaries’ mortality-improvement projection scale applied to the 2012 IAM base table to reflect future longevity improvements.

Monte Carlo

Monte Carlo — a simulation method that generates thousands of random scenarios and averages outcomes to estimate the expected value of a path-dependent guarantee.

rider

Rider — an optional add-on to a base annuity contract that adds a feature (e.g. guaranteed lifetime income) for an extra annual fee.

benefit base

Benefit base — a notional amount used to compute the guaranteed income (e.g. 5% of the benefit base per year). Not the cash value — you cannot withdraw the benefit base.

roll-up

Roll-up — a contractual growth rate applied to the benefit base during the deferral period (e.g. 6% per year for 10 years), regardless of market returns.

ratchet

Ratchet — an annual reset of the benefit base to the highest account value reached, so the income guarantee captures market gains it has not yet seen below.

step-up

Step-up — same concept as ratchet: the benefit base resets up to the account value on the contract anniversary if the account value is higher.

deferral

Deferral period — the years between contract purchase and when income withdrawals begin. Roll-ups and step-ups apply during this window.

high-water mark

High-water mark — the highest account value the contract has reached. Step-up / ratchet riders reset the benefit base to this level on the contract anniversary.

AIR

Assumed Investment Return (AIR) — the rate of return assumed by the carrier when computing initial annuity payouts; actual payouts adjust as real returns differ from AIR.

PV

Present value (PV) — what a stream of future dollars is worth today after discounting for time value. Higher PV = more valuable today.

ITM

In-the-money (ITM) — a guarantee is "in the money" when its protected amount (e.g. the benefit base) exceeds the account value, meaning the rider is currently providing economic value.

GAAP

GAAP — Generally Accepted Accounting Principles, the US accounting standards under which insurers disclose balance-sheet items like Level 3 (hard-to-value) assets.

PE

Private equity (PE) — investment firms that buy companies, including life insurers. PE-owned insurers have historically tilted asset portfolios toward less-liquid, higher-yielding holdings; AnnuityVoice surfaces this with a -3 point IC sub-score adjustment.

cohort

Cohort — in actuarial usage, a group of policyholders with similar characteristics (e.g. all 60-year-old buyers) used to project mortality and persistency for valuation.

Level 3

Level 3 assets — under GAAP, holdings without observable market prices that must be valued by internal models. Higher Level 3 % = less transparent balance-sheet valuation.

byte-reproducible

Byte-reproducible — a rating that can be regenerated to the exact same bytes given the (product spec, methodology version, seed). Lets a reader verify the grade for themselves.

crediting segments

Crediting segments — the distinct strategies a RILA offers (e.g. 1-year cap with 10% buffer vs 6-year participation with 20% buffer). Each is priced separately.

allocation profile

Allocation profile — how a RILA buyer divides their premium across the available crediting segments. AnnuityVoice scores three named profiles (conservative / balanced / growth) per product.

surrender flexibility

Surrender flexibility — how easily a holder can exit the contract or take partial withdrawals without penalty. Driven by the surrender schedule, free-withdrawal corridor, and hardship waivers.

actuarial PV

Actuarial present value — the present value of a future payment stream weighted by survival probability (and any other contingent factors). Standard tool for valuing guarantee riders.

One short note a month — what changed in the catalog, what a recent grade move actually means for a holder. No selling, ever.

We use your address only to send the digest. See privacy & data use.