What Are Indexed Annuities
Indexed annuities are tied to the performance of a specific stock market index such as the Dow Jones industrial average commonly referred to as the Dow the SP 500 or the Nasdaq composite.
What are indexed annuities. An indexed annuity is a type of insurance contract. A fixed index annuity is a type of fixed annuity that credits interest based on the performance of an external stock market index providing the potential to earn higher interest rates than offered by a fixed annuity. For the same investment fixed indexed annuities generate less income than a pure income annuity.
In our Ultimate Guide to Fixed Index Annuities we will cover everything youll need to know. Indexed annuities that are not regulated by the SEC include minimum guarantees that limit and in many cases eliminate the potential for investment losses. Indexed annuities perform well when the financial markets perform well.
What is an Indexed Annuity. Indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a market index hence the name. The most basic is a multi-year guaranteed annuity which provides a fixed rate of return over a specific.
With a fixed index annuity your payments are based on. An indexed annuity is a contract issued and guaranteed by an insurance company. You invest an amount of money in return for protection against down markets with the potential for investment growth linked to an index.
It is one type of annuity contract between an investor and an insurance company. An indexed annuity is a complex financial product. An indexed annuity also known as a fixed-index annuity is a type of annuity whose income payments are tied to a stock index such as the SP 500.
In a nutshell an indexed annuity -- which is sometimes called a fixed-indexed annuity or an equity-index annuity or a variation on one of those -- is an investment you can make to help yourself. Indexed annuities are fixed annuities protected from downside markets with upside limited not assured. For this the insurance company offers a fixed interest rate for a specific number of years similar to a certificate.