Equity Indexed Annuities Summed Up
Annuity products that benefit from stock market gains but also protect your principal through stock market declines are called equity indexed annuities, also known as indexed annuities or fixed indexed annuities.
Equity indexed annuities link interest earned to the performance of a stock market index such as the S&P 500. These fixed indexed annuities credit interest based on changes to the index with which the annuity is linked. Interest is credited when the index value increases. However, if the index value decreases the annuity account balance stays the same.
When an equity indexed annuity contract is issued, the account is opened and the value of its index is determined. The interest credit received to the equity indexed annuity depends on the factors specified in the indexed annuity contract. Generally, indexed annuities provide a guaranteed minimum contract value that is applied in a worst case scenario. So, no matter what happens with the stock market index the annuity is tied to, you are guaranteed a minimum interest rate and your account balance can not drop below that value.
Indexed annuities can be used as a unique retirement investment, because they can greatly improve earnings without suffering from any unforeseen downturn in the stock market.
Fully understanding the ins and outs of an equity indexed annuity and its options may require some additional expertise. To receive more free information about equity indexed annuities, please fill out our form. The information that you submit to Annuity Advantage is kept private and will only be used for internal purposes. If you submit this form today, you will receive a copy of our brochure sent via e-mail and one of our annuity specialists will be in touch with you shortly to provide any additional details you may desire.