An indexed annuity is one that earns interest or provides benefits that are linked to an external reference. One of the most commonly used indices is the S&P 500. The value of any index varies from day to day and is not predictable.
When you buy an indexed annuity, you own an insurance contract. You are not buying shares of any stock.
An indexed annuity is a fixed annuity, but it’s different from other fixed annuities because of the way it credits interest to your annuity’s value. Some fixed annuities only credit interest calculated at a rate set in the contract. Other fixed annuities also credit interest at rates set from time to time by the insurance company. Indexed annuities credit interest using a formula based on changes in the index it’s linked to. How much interest you get and when you get it depends on the features of your particular annuity.
Your indexed annuity, like other fixed annuities, also promises to pay a minimum interest rate, even if the index-linked interest rate performs lower. The value of your annuity also never drop below a guaranteed minimum.
To find out more about this amazing financial product and talk with an experienced professional about which annuity is best for you, call 800-442-9899 or click the Get Started button.