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Professor Clemens purchased an Equity-Indexed Universal Life insurance policy. She has decided to have her entire account value exposed to the index crediting mechanism. The
Professor Clemens purchased an Equity-Indexed Universal Life insurance policy. She has decided to have her entire account value exposed to the index crediting mechanism. The participation rate is 90%, the growth cap is 8%, and the growth floor is 2%. If the index growth rate over the segment term is 8.5%, what is the rate that will be used to calculate her interest credits? Be sure to show your calculations and explain how you found your answer.
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