Contract owners of registered index-linked annuities (RILAs) can lose money based on decreases in the value of the stock market index, but they can limit their losses by using floors and buffers. For a given RILA, suppose that, at the end of the term, the index dropped 25% in value, but the RILA’s accumulated value decreased by 10%. With regard to floors and buffers, this RILA has a
floor of 5%
floor of 15%
buffer of 5%
buffer of 15%