Your friend William owns an indexed life insurance policy with a segment term of five years. He asks you on what date the change in the index is calculated and when crediting occurs. You answer that although insurance company practices differ, it would typically occur _____________________________.

1.  at the end of the five-year period.

2.  on the anniversary of the date the segment was created.

3.  on the policy's anniversary date.

4.  at the end of the first calendar year following creation of the segment.