Posts tagged ‘Methods’

Index Annuity Crediting Methods

An index annuity earns interested based on an external financial index, such as the S&P 500. Interest that is credited to the annuity is based on a formula that is linked to the underlying index. An index annuity also is usually guaranteed to pay a minimum interest rate so that investors do not lose their initial investment premiums.

One of the most important features in determining the actual interest received on a contract is the crediting method used to measure the amount of change in the underlying index. The three most common methods are annual reset (ratcheting), high-water mark, and point-to-point:

Annual Reset
? Interest is determined by comparing the index value at the end of the contract year with the index value at the beginning of the contract year. Interest is added each year for the term of the contract.

High-Water Mark
? With this method, the index value is recorded at various points in time during the term of the contract. Typically, the annual anniversary is used as the reference points. Interest is added at the end of the contract and is based on the difference between the highest index value and the beginning index value.

Point-to-Point
? The final method pays interest at the end of the contract, similar to the high-water mark method. However, the amount is based on the difference between the index value at the end of the term and the index value at the beginning of the contract.

These three methods may yield similar results over one time span or drastically different results during another. It is important that investors research the options that are available on the annuity index annuity policy they are interested in because there are unique advantages and disadvantages for each method.

The annual reset method has the advantage that the interest is reevaluated each year and that future decreases in the index cannot affect the interest that was earned in previous years. The disadvantage for annual reset is that the participation rate may change each year. In general, its level will be lower than other indexing methods. Sometimes this method is also combined with a cap on the amount of interest that can be earned in a given contract year.

The advantage of the high-water mark method is that a customer may receive a higher amount of interest than other methods if the index reaches a high point towards the beginning or middle of the contract, then falls at the end of the contract term. However, the disadvantages are that this method sometimes comes with a cap and a lower participation rate than other methods. In addition, some contracts state that if the annuitant surrenders the contract before the end of the term, then the interest is forfeited.

The final method, point-to-point, has the advantage that many of the contracts have a higher participation rate than other index annuity methods since interest cannot be calculated before the end of the policy. However, like with the high-water mark method, some contracts will not pay interest if the annuity is surrenders before the term has ended.

The three index annuity crediting methods discussed above seem similar, however, the index-linked interest that is paid on an annuity will heavily depend on which method is used for the particular policy. Therefore, it is important that investors weigh the pros and cons of each method and choose the one best suited to current market trends.

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Behaviour Management Methods

Many schools face problems with challenging and difficult behaviour from students. This is one of the biggest reasons that teachers will leave the profession. Many new and inexperienced teachers haven’t properly prepared themselves for what working in a real life situation will be like. Many pupils can often be rude and play upon the fact that a teacher is new to the profession and will cause all sorts of behaviour problems for the teacher to deal with. 

Schools are often found trying to cope with behaviour problems and it can jeopardise a school greatly. One student’s bad behaviour can really disrupt the whole learning of an entire class. Sometimes bad behaviour can also rub off onto other students particularly younger ones. So it is vital these problems are nipped in the bud right from the beginning. 

As many as 50% of new teachers that are employed in a teaching job will leave in the first five years due to bad behaviour from students affecting them personally. This is a startling statistic and cannot be tolerated. This is why it is important that all schools and learning centres have a structured and effective behaviour management plan put in place. 

A behaviour management plan is regularly put in place to prevent bad behaviour. A behaviour management plan also allows teachers especially less experienced ones to feel more in control of difficult situations if they ever arise. Behaviour management plans involve a number of things such as how to effectively plan lessons to avoid boredom which may lead to disruptive behaviour, how to deal with challenging behaviour etc. 

A number of people around the country specialise in this area and can help if you are continually finding yourself battling with students instead of building good relationships and allowing them to learn and you to teach. These professionals will provide assistance what ever the problem may be and they will also assess your situation and provide solutions and a programme designed specifically for you.

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