BONUS CREDITS FOR ANNUITIES
In an attempt to attract purchasers, some insurance companies offer variable annuity contracts with "bonus credits." A bonus credit is the extra amount an insurance company agrees to add to the value of your contract-usually a specified percentage (typically ranging from 1% to 5%) of the payments you make during a certain time period. While bonus credits sound like free money, variable annuities with bonus credits may have higher expenses that offset any gain.
In an attempt to attract purchasers, some insurance companies offer variable annuity contracts with “bonus credits.” A bonus credit is the extra amount an insurance company agrees to add to the value of your contract-usually a specified percentage (typically ranging from 1% to 5%) of the payments you make during a certain time period. While bonus credits sound like free money, variable annuities with bonus credits may have higher expenses that offset any gain.