Indexed Annuities

Sometimes referred to as Fixed Indexed or Equity Indexed Annuities

Indexed Annuities, sometimes called Fixed Indexed Annuities or Equity Indexed Annuities are similar to Fixed Annuities except the interest rate is tied to a market indices such as the S&P 500 index. One of the most attractive features of a Fixed Indexed Annuity is that annuitants can participate in market gains but do not participate in market declines. In other words Fixed Indexed Annuities have minimum guarantees for interest and income.

All Indexed Annuities have a participation rate, also known as the index rate, which is the percentage by which the annuity interest rate will be calculated against the market performance of the indices linked to the indexed annuity. For example, if the participation rate is 80% and the S&P 500 increases 10% per year, the Indexed Annuity would be credited with interest gains of 8 %. There are several other details of Indexed Annuities, such as the way in which interest is credited to the annuity owner, that are best explained by an annuity expert and put in context with how they would benefit you in relation to your unique financial goals.

Indexed Annuity Product Names

All annuities are typically referred to by a generalized product name that represents the core features of the annuity contract. Referring back to the timing of the annuity funding and the deferred annuity type, we can label fixed annuities in one of three ways. The order of these product terms may vary from insurance company to insurance company but the fundemental features will likely be the similar when these terms are used.

  • Single Premium Deferred Indexed Annuity
  • Flexible Premium Deferred Indexed Annuity

Is an Indexed Annuity Right For You?

Below are some considerations that may help you determine if a fixed index annuity is right for you.

  • You are looking for tax-deferred growth
  • You want a minimum interest rate but like the idea of potentially benefiting from positve market changes
  • You want competitive cap rates to help your money grow 
  • You want straightforward crediting methods aligned with a market index or fixed rate alternatives
  • You’re looking for a competitive guaranteed lifetime income option
  • You intend to remain in the contract through the surrender period
  • You do not plan to take withdrawals greater than the free withdrawal amount

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