Account Value – The total of the Fixed Account value and the value of the index strategy(ies) under the registered index-linked annuity contract at the beginning or end of the term.

Allocation Option – An index option, Fixed Account, or any other option available to which the account value may be allocated.

Averaging (daily, monthly) – An index crediting method that uses the average value of an index during a period, typically daily or monthly, to determine interest credits. (See also: Crediting Strategy)

Buffer – Limits the amount of any negative performance but leaves the contract owner to assume any remaining negative performance that exceeds the buffer at the end of the term. For example, if a registered index-linked annuity has a 10% buffer and the index value is down 15% at the end of the term, the account value would decrease by only 5%. (See also: Downside Protection, Shield Rate)

Buffered Annuity – Also known as an index-linked annuity, registered index-linked annuity, or structured annuity; an annuity that tracks a chosen index or indices for a selected term and typically provides a maximum rate of return in exchange for the issuing insurance company absorbing a percentage of loss if the index value at the end of the term is lower than the index value at the beginning of the term. (See also: Buffer)

Cap Rate – Also known as a ceiling; the maximum percentage gain from the tracked index that the issuing insurance company credits to the contract owner at the end of the selected term. For example, if the Cap Rate is 200% and the index value is up 150% at the end of the term, the account value would increase by 150%. But if the index value is up 250% at the end of the term, the account value would increase by 200%.

Ceiling – The maximum percentage gain from the tracked index that the issuing insurance company credits to the contract owner at the end of the crediting period. (See also: Cap Rate)

Crediting Period – Also known as the term or term length; the amount of time that the crediting strategy is in effect for a registered index-linked annuity. Typical crediting periods are 1, 2, 3, and 6 years. The crediting period, downside protection, and chosen index impact the crediting strategy offered as part of the annuity. (See also: Segment)

Crediting Strategy – Also known as the rate crediting type; the method used to determine how much interest the contract owner will receive at the end of the term. Cap Rate, Step Rate, and Participation Rate are examples of crediting strategies. In a registered index-linked annuity, the crediting strategy typically measures the change in value of the tracked index from the beginning of the term to the end of the term.

Daily Averaging – A method of interest crediting in which the value of the index at the beginning of the annual term is compared with a daily average of that index over the length of the term. (See also: Averaging)

Death Benefit Amount – The amount paid to the designated beneficiaries when the contract owner passes away. Typically the death benefit value will be the account value or the greater of the account value and the purchase payment (reduced by any withdrawals). The payout method may depend on the contract owner’s age at the time the annuity was issued.

Downside Protection – Offers the contract owner some confidence during a market downturn. Buffers and floors are common downside protection options. For example, if a registered index-linked annuity has a 10% buffer and the index value is down 15% at the end of the term, the account value would decrease by only 5%. If a RILA has a 10% buffer and the index value is down 5% at the end of the term, the account wouldn’t lose any value because the issuing insurance company would absorb the loss. If a RILA has a 10% floor and the index value is down 25% at the end of the term, the account value would decrease by 10%. In that same RILA, if the index value is down 5% at the end of the term, the account value would decrease by 5%. (See also: Buffer, Floor)

Dual Directional Index Strategy – A crediting strategy that may offer some upside potential if the performance of the tracked index at the end of the term is negative but within the buffer. If the index has a negative return that is within or equal to the buffer, the contract owner would receive a positive index credit equal to the percentage of the negative return at the end of the term. For example, if the registered index-linked annuity has a buffer of 10% and the index return is down 5% at the end of the term, the contract owner would receive a positive index credit of 5%. If the index return is positive at the end of the term, the contract owner would receive a positive return up to the Cap Rate. If the index return is negative at the end of the term and exceeds the buffer, the account value would be reduced by any loss that exceeds the buffer. For instance, if the index return declines by 12% with a buffer of 10%, the account would decrease by 2%. (See also: Step Rate Edge)

Fixed Account – The contract owner may choose to allocate a portion of their premium to a Fixed Account, if available, to ensure consistent growth. This portion of the annuity would pay a fixed rate rather than tracking the performance of an index.¹

Flexible Premium – An option provided by some insurance companies that allows the investor to make additional purchase payments, with the account value of the annuity changing as additional contributions are made.

Floor – A maximum percentage of loss that the contract owner is willing to take. For example, if a registered index-linked annuity has a 10% floor and the index value is down 25% at the end of the term, the account value would decrease by 10%. In that same RILA, if the index value is down 5% at the end of the term, the account value would decrease by 5%. (See also: Downside Protection)

Growth Potential – Also known as upside potential; the opportunity for growth at the end of the term that a registered index-linked annuity provides. Because RILAs typically have a higher Cap Rate, they generally offer more growth opportunity than fixed or fixed indexed annuities. However, an increased amount of growth potential often comes in exchange for some downside protection. For instance, fixed and fixed indexed annuities are guaranteed against loss, while RILAs may only prevent a level of loss based on the buffer or floor.

Index-Linked Annuity – Also known as a buffered annuity, registered index-linked annuity, or structured annuity; an annuity that tracks a chosen index or indices and typically provides a maximum rate of return in exchange for the issuing insurance company absorbing a percentage of loss if the index value at the end of the term is lower than the index value at the beginning of the term.

Index Option – May be used to describe the combination of factors within a registered index-linked annuity, including the index, level of protection, crediting strategy, and term. (See also: Shield Option)

Index Performance – Also known as index value; the published closing value of an index on any given business day. Indices available with registered index-linked annuities may include the S&P 500^® Index, Russell 2000^® Index, MSCI EAFE Index, Nasdaq-100^® Index, and others.^A,B,C,D

Index Strategy – A registered index-linked allocation option that provides a return based on the performance of the tracked index, level of protection, crediting strategy, and chosen term. (See also: Index Option, Shield Option)

Index Tracking – Rather than investing directly in an index, a registered index-linked annuity tracks the performance of the index and credits or reduces the account value accordingly at the end of the term based on the chosen index strategy.

Index Value – Also known as index performance; the published closing value of an index on any given business day. Indices available with registered index-linked annuities may include the S&P 500^® Index, Russell 2000^® Index, MSCI EAFE Index, Nasdaq-100^® Index, and others.^A,B,C,D

Interim Value – The value of each index strategy calculated any time between the term start date and term end date. The Interim Value is used to determine the account value if the contract owner makes a withdrawal, surrenders the account, chooses to annuitize, or passes away before the end of the term. (See also: Market Value Adjustment)

Lifetime Income Rider – An optional benefit available with some registered index-linked annuities that can provide guaranteed lifetime income. The contract owner can receive a set amount of income for life that can be taken systematically. Some RILAs may offer an income option that maximizes lifetime income in exchange for a reduced crediting strategy rate and/or fee.²

Market Value Adjustment (MVA) – A calculation that may be applied to an amount of money either withdrawn or annuitized. An MVA will apply for a designated length of time or set number of years. (See also: Interim Value)

New Contract Rate – The rate assigned to an individual index strategy at the time of purchase; for example, a 6-year registered index-linked annuity tracking the S&P 500 Index with a 200% Cap Rate and 25% buffer. These rates are typically valid for the length of the term. (See also: Renewal Rate)

Participation Rate – The amount of index growth an investor may capture as part of the annuity. For example, if the Participation Rate is 75% and the index increases by 15%, the interest credit will be 75% of 15%, or 11.25%. (See also: Crediting Strategy)

Performance Lock – A feature that allows the contract owner to lock in the Interim Value of an index strategy before the end of the term. This means that even if the tracked index loses value for the remainder of the term, the investor’s ending value for the index strategy will be the locked Interim Value. Once the Performance Lock goes into effect, the contract owner may not experience any additional growth or loss.³

Performance Trigger – A crediting strategy in which the account value will be credited with a predetermined percentage of growth if the chosen index is flat or up at the end of the term. This method does not provide a positive credit if the index is down at the end of the term. (See also: Step Rate)

Point-to-Point Crediting – The most common crediting strategy in a registered index-linked annuity; this measures the change in value of the tracked index from the beginning of the term to the end of the term.

Protection Level – The amount of any negative index performance that is absorbed by the issuing insurance company at the end of the term. For example, if a registered index-linked annuity has a 10% buffer and the index value is down 15% at the end of the term, the account value would decrease by only 5%. If a RILA has a 10% floor and the index value is down 15% at the end of the term, the account value would decrease by 10%. (See also: Buffer, Floor)

Purchase Payment – The amount of initial investment in a registered index-linked annuity. With a single premium, the purchase is funded by one payment. With a flexible premium, value may be added to the annuity over time through additional premium payments. (See also: Flexible Premium)

Rate Crediting Type – Also known as the crediting strategy; the method used to determine how much interest the contract owner will receive. Cap Rate, Step Rate, and Participation Rate are examples of rate crediting types. In a registered index-linked annuity, the rate crediting type typically measures the change in value of the tracked index from the beginning of the term to the end of the term.

Reallocation – When the term ends, the contract owner can distribute their funds utilizing different options. If Performance Lock is elected, the account may have an inter-term reallocation, allowing the contract owner to put that money into a new term rather than waiting until the end of the existing term.

Registered Index-Linked Annuity (RILA) – Also known as a buffered annuity, index-linked annuity, or structured annuity; an annuity that tracks a chosen index or indices and typically provides a maximum rate of return in exchange for the issuing insurance company absorbing a percentage of loss if the index value at the end of the term is lower than the index value at the beginning of the term.

Renewal Rate – The rate assigned to an individual index strategy at the time of renewal. For example, a new contract rate for a 6-year term tracking the S&P 500 Index with a 25% buffer may have a 200% Cap Rate, but the Cap Rate on a renewal could be higher, lower, or the same as newly issued contracts. (See also: New Contract Rate)

Rider – An option that may be available as part of an annuity for a separate fee. Common annuity riders have historically included lifetime income and/or an enhanced death benefit as well as other features.

Segment – The length of time from the start to the end of the tracking period in which value is determined. (See also: Crediting Period, Term)

Shield Option – Specific to Brighthouse Financial; includes the term, index, level of protection (Shield Rate), and crediting strategy. (See also: Index Option)

Shield Rate – The level of protection (buffer) for a Brighthouse Financial registered index-linked annuity; the amount of any negative index performance that is absorbed by the company at the term end date. For example, a Shield Rate of 25% means Brighthouse Financial would provide a 25% buffer. If the negative index performance is more than the Shield Rate, the account value would be reduced by the difference. For instance, if the index value is down 40% at the end of the term, the account value would decrease by 15%. (See also: Buffer)

Step Rate – A rate crediting type (crediting strategy) offered on some Brighthouse Financial products that credits a predetermined percentage of growth if index performance is flat or up at the end of the term. For example, if the Shield Rate is 10%, the Step Rate is 6%, and the index performance is at or above 0% at the end of the term, the account value would be credited the 6% Step Rate. If the index value is down at the end of the term, the Shield Rate would go into effect to protect the investor from the first 10% of loss. (See also: Performance Trigger)

Step Rate Edge – A rate crediting type (crediting strategy) offered on some Brighthouse Financial products that credits a predetermined percentage of growth, called the Edge Rate, if index performance is greater than or equal to the Shield Rate at the end of the term. The Edge Rate also serves as a growth cap when the index value is positive at the end of the term. For example, if the Shield Rate is 10%, the Edge Rate is 7%, and the index is flat at the end of the term, the account value would be credited the 7% Edge Rate. However, if the index value is down 8%, the account value would still be credited the 7% Edge Rate because the index value decrease would be less than the Shield Rate. If the index value is up 12%, the account value would be credited the 7% Edge Rate. If the index value is down 12%, the account value would decrease by only 2% because of the 10% Shield Rate.

Structured Annuity – Also known as a buffered annuity, index-linked annuity, or registered index-linked annuity; an annuity that tracks a chosen index or indices and typically provides a maximum rate of return in exchange for the issuing insurance company absorbing a percentage of loss if the index value at the end of the term is lower than the index value at the beginning of the term.

Tax-Deferred Growth – A feature of a registered index-linked annuity in which the value grows tax-free. Typically, the contract owner doesn’t have to pay taxes until money is withdrawn from the annuity. The benefit of tax-deferred growth is that there’s more money in the account with the potential to grow.

Term – Also known as the term length or crediting period; the amount of time that the crediting strategy is in effect for a registered index-linked annuity. Typical terms are 1, 2, 3, and 6 years. The term, downside protection, and chosen index impact the crediting strategy offered as part of the annuity. (See also: Segment)

Upside Potential – Also known as growth potential; the opportunity for growth at the end of the term that a registered index-linked annuity provides. Because RILAs typically have a higher Cap Rate, they generally offer more growth opportunity than fixed or fixed indexed annuities. However, an increased amount of upside potential often comes in exchange for some downside protection. For instance, fixed and fixed indexed annuities are guaranteed against loss, while RILAs may only prevent a level of loss based on the buffer or floor.

Withdrawal Charge – Also known as a contingent deferred surrender charge (CDSC) or surrender charge; a percentage charge applied to a withdrawal amount in excess of the Free Withdrawal Amount in a contract year. These charges decline over time and typically discontinue after the contract surrender period. Not all annuities have a withdrawal charge.