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The Christian Science Monitor – More Drawn to Annuities That Offer Safety with Stocks

Published: August 22, 2005 Categories: In the News, Indexed Annuities CEO and Founder, Ken Nuss, extensively quoted in article from The Christian Science Monitor titled, “More drawn to annuities that offer safety with stocks” by Martin Skala.

Here are some of the highlights...

Can you link the returns on a savings instrument to the stock market and still call it a safe? Surprising as it may seem, you can if you’re promoting a type of fixed annuity that promises savers the best of both possible worlds: participation in the stock market’s potential growth while avoiding any capital losses.

“Indexed annuities are an appealing niche product for consumers looking for the safety and features of a fixed annuity but with the potential for higher yields,” says Ken Nuss, president of, an annuities marketer in Medford, Ore.

Index-annuity buyers typically come from two camps, says Mr. Nuss. The first consists of conservative investors whose incomes have been squeezed by the low interest rates available on traditional savings instruments such as CDs. The second are risk-averse mutual-fund investors who fear they might not recover from a loss of principal during a bear market. Most of the latter group are seniors with substantial assets who are close to or already in retirement. “They are looking to earn 6 percent to 9 percent a year on a portion of their assets with no downside risk. They won’t lose principal if they hold the contract through the surrender period, even if the stock market and index falls every year,” Nuss adds.

EIAs are offered by more than three dozen insurers, including such well-known names as Allianz, Allstate, ING, Jefferson-Pilot, and Sun Life Assurance of Canada. Each policy, warns Nuss, has “its own twists,” and should be examined carefully. Among his tips for prospective buyers:

  • Since EIAs are sold mainly by insurance agents, make sure you consult one who has compared a variety of offerings and understands all the interest- crediting methodologies.
  • Don’t put all your money into a single contract, especially sums over $100,000.
  • Lean toward contracts with a shorter term, preferably 10 years or less. That will allow you to reevaluate your financial position sooner if personal circumstances change.
  • Be wary of any policy that requires mandatory annuitization at the end of the term. A lump sum payout option affords greater financial flexibility.

The entire article can be explored here: