Growth Without Market Risk
Indexed Interest Potential
Benefits of Fixed Index Annuities
Your Hard-Earned Money, Kept Safe
Benefits of Fixed Index Annuities
A fixed index annuity has many great benefits it can provide to retirees. The money you worked hard for remains safe. That means even if you choose an index that drops in value, you won’t have any losses. The law actually requires insurance companies to keep your money safe. This means you have the opportunity of gains if your index does well, all with protection from the insurance company and without the risk of losing your hard-earned money. With a set reasonable rate of return,** you won’t need to worry about losing your nest egg if the market is down. For many retirees, this gives them the peace of mind that they won’t outlive their retirement savings.
What You Need to Know
What Affects Potential Interest Rates?
When you buy your fixed index annuity (FIA), often you have a choice of indexes to allocate to the annuity’s value. Also, you can choose the crediting method that is used to track changes in your index(es). However, before choosing a crediting method it is important to take a look at some of the factors that affect the way your indexed interest potential is calculated.
You Have Choices
Indexed Interest Potential and Growth
Despite the word “fixed,” a fixed index annuity (FIA) actually provides you with a lot of flexibility. You may be able to choose the type of index you want to link to your annuity — or even multiple indexes. Your FIA can grow interest based on the changes in the index you pick. You also have a choice of crediting method, which is how the insurance company calculates your index interest. For example, you can choose a monthly or annual crediting method, and some methods use an average of value over a period of time.
When the rate reaches above a specific point, you get the index interest earnings. If the index drops, your annuity’s value won’t drop just because the index did. Interest rates also depend on other factors like spread, cap, and participation rate. There is no one size fits all solution when it comes to FIAs — every situation is different.
