Weighting Multiple Index Crediting Method

Weighting Multiple Index Crediting Method refers to a strategy used to determine the interest credited to the policy's cash value based on the performance of multiple indices. This method allocates a specific percentage or "weight" to each index, and the overall credited interest rate is a combination of the returns from all the indices, each contributing proportionally according to its assigned weight.

For example, an IUL policy might use a Weighting Multiple Index Crediting Method to allocate 50% of the interest calculation to the performance of the S&P 500, 30% to the performance of the EURO STOXX 50, and 20% to the performance of the Dow Jones Industrial Average. The final credited interest rate would be a weighted average of the returns of these indices, subject to any caps, floors, or participation rates specified in the policy.

This method allows policyholders to potentially benefit from the diversification of risk and return across different market indices, while still enjoying the tax advantages and death benefit protection offered by an IUL policy.