Fixed Index Annuity

What’s a Fixed Index Annuity

A traditional annuity has a fixed rate for the period of a contract.

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 therefore your risk of market loss is zero.

An annuity can provide an endless pension-like income stream. The need for an income floor depends on each individual’s risk tolerance and overall investment goals. How much risk can you shoulder determines how much risk you may want to transfer.

You can set income payments to start when you need, now or in the future.

You can peel off growth of other investments that you have diversified in, perhaps, to place the funds in an annuity, this is if you are motivated to transfer the risk of outliving your money.

You may enjoy the risk involved in playing the investment game. This doesn’t automatically exclude your interest in a contractually guaranteed income floor in the future. If you allocate a portion of money in guarantees this does provide security on some of your funds while have some in the market fun.

Annuities provide contractually guaranteed income for life for you or both of you if married, a guarantee unique to annuities.

You can create an income floor for the future. An income floor is usually designed to cover the amount needed every month to cover expenses for you and/or your spouse. There are many types of annuities, so individuals can find a product that fits their particular situation. They are primarily used to contractually fill income gaps and provide a pension-like lifetime income stream.

Consider this your safe money in an annunity.