A Registered Index-Linked Annuity, commonly called a RILA, is an annuity that provides growth potential linked to the performance of a market index while allowing the owner to accept a defined amount of market risk.

Unlike a fixed indexed annuity, a RILA can experience investment losses.

In exchange for accepting some downside risk, RILAs may provide greater growth potential than traditional fixed or fixed indexed annuities.

A RILA typically links returns to one or more market indexes.

The contract defines both:

• How much upside potential you may receive
• How much downside risk you are willing to accept

Many RILAs use either a buffer or a floor.

Buffer Protection

A buffer protects against the first portion of a market decline.

For example, with a 10% buffer, if the applicable index declined 8% during the measurement period, the contract may absorb that decline.

If the index declined 20%, the investor could generally experience a loss beyond the protected 10%, subject to the exact terms of the contract.

Floor Protection

A floor works differently. Instead of absorbing the first portion of a loss, the contract may limit the maximum loss to a predetermined amount.

Every RILA is different, so understanding exactly how the protection feature works is extremely important.

A RILA may appeal to someone who wants:

• More growth potential than many traditional fixed products
• Some protection against market declines
• Tax-deferred growth
• Index-linked return potential
• The ability to select different risk and return combinations
• Optional income features, depending on the contract

A RILA generally falls between a fixed indexed annuity and a traditional market investment in terms of risk.

You accept more risk than with a fixed indexed annuity, but the contract may provide a defined level of downside protection that a direct market investment does not provide.

RILAs are registered securities as well as insurance products. They can lose value, including principal, depending on market performance and the terms of the contract.

Returns may also be limited by participation rates, caps, spreads, or other contract provisions.

Investors should understand the surrender period, crediting method, downside protection, fees, withdrawal provisions, and income features before purchasing a RILA.

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