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How To Build Your Own Personal Income Annuity Pension - 800-286-1812
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Here's What People Are Saying
Indexed Annuity Leadership Council Testimonial

David, a recently retired engineer, talks about shifting his mindset and his money from risk to safety for his retirement nest egg.

" Indexed annuities have worked well for my wife and me."

David Leeper, Retired
Indexed Annuity Leadership Council Testimonial
Louise, a self-employed healthcare consultant, explains how getting out of the stock market and into indexed annuities has brought her closer to her retirement goals

Louise Bridges, Business Owner
Video Overview
What Is An Annuity?
This video explains what an annuity is in straight forward terms. What are differences between fixed annuities and variable annuities? Why is the word premium superior to the word deposit? What annuities use the word single and why some annuities use the word flexible? Video play time 2:09

What Are Fixed Index Annuities?

A index annuity is a fixed index annuity, that earns interest or provides benefits that are linked to an external equity reference or an equity index. The value of the index might be tied to a stock or other equity index.  The value of any equity index varies from day to day and is not predictable. When you buy a fixed indexed annuity you own an insurance contract. You are not buying shares of any stock or equity index.

What is the impact of some other fixed index annuity product features?

Fixed Indexed Annuities credit interest using a formula based on changes in the index to which the fixed indexed annuity is linked. The formula decides how the additional interest, if any, is calculated and credited. How much additional interest you get and when you get it depends on the features of your particular fixed indexed annuity.

What Are Participation Rates With No Cap?

The participation rate decides how much of the increase in the index will be used to calculate fixed index-linked interest. For example, if the calculated change in the index is 9% and the participation rate is 70%, the index-linked interest rate for your fixed annuity will be 6.3% (9% x 70% = 6.3%).  Some annuities guarantee that the participation rate will never be set lower than a specified minimum or higher than a specified maximum.

What Are Caps On Interest Earned?

While a cap limits the amount of interest you might earn each year, annuities with this feature may have other product features you want, such as annual interest crediting or the ability to take partial withdrawals. Also, annuities that have a cap may have a higher participation rate. As of  10/16/2015, average annual caps are 4%. This video shows how a participation rate with NO Caps work.

Margin/Spread/Administrative Fee

In some annuities, the index-linked interest rate is computed by subtracting a specific percentage from any calculated change in the index.  This percentage, sometimes referred to as the "margin", "spread", or "administrative fee," might be instead of, or in addition to, a participation rate.  For example, if the calculated change in the index is 10%, your annuity might specify that 2.25% will be subtracted from the rate to determine the interest rate credited.  In this example, the rate would be 7.75% (10% -2.25% = 7.75%). In this example, the company subtracts the percentage only if the change in the index produces a positive interest rate.

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