Fixed Index Annuities Review

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Are you considering a purchase of a fixed index annuity? It's important to evaluate your unique financial needs and determine if it'll be a suitable fit. Many Americans have found fixed index annuities to be an effective vehicle for achieving retirement income security.

Consider the following data:

• Since 1995, Americans have purchased almost $400 billion in fixed index annuities (From Advantage Compendium Ltd)
• 99.994% of indexed annuity owners have no complaints about their indexed annuity purchase (Advantage Compendium Ltd)
• Only 0.006% of indexed annuity owners have registered complaints about their annuity product purchase (Advantage Compendium Ltd)
• In a 2012 study, 83% of indexed annuity buyers and 86% of traditional fixed index annuity buyers reported satisfaction with their annuity purchase (LIMRA)
• At the close of 2014, fixed index annuity sales were $47 billion, a 104.3% increase from sales in 2004 ($23 billion in sales that year) (Beacon Research)

Fixed index annuities were originally created as a financial alternative to CDs and their meager potential for retirement income. The catastrophic effects of the 2008-2009 financial crisis and the changing dynamics within the American workplace landscape also have had an impact. Now many Americans are exploring fixed index annuities as an alternative retirement vehicle.

Fixed Index Annuities Review: Other Details
Why are consumers find fixed index annuities attractive? We've covered the pros and cons of this investment option, but here's a brief rundown:

Principal protection – Investments within the stock market offer high return potential. But with the stock market's volatility, they are also subject to heavy risks. That includes risks of losing some of the money you originally invested.

It's a different outcome for fixed index annuity products. When market downturns arise, your principal is protected. Also with other annuity products like variable annuities – your principal isn't protected. Like with all financial products, we recommend you be fully educated about different product features before making any purchase.

Some measure of growth potential – Keep in mind: Fixed index annuities were created to give options with stronger potential for interest earnings than CDs and their limited returns. Fixed indexed annuities are linked to equity indexes such as the Standard & Poor's 500 Index. Based on this index's performance, investors receive a percentage of the index's change in the form of credited interest.

This interest rate is often capped at a preset maximum. But fixed index annuities do offer some measure of growth potential. In times of market downturn, investors are given a guaranteed minimum rate (usually 1-2%). Or they may come with another feature, in which a fixed index annuity contract is credited zero percent, but the principal and credited interest earnings are retained.

Guaranteed income – Like all annuity products, fixed index annuities are a contract between investors and an insurance carrier. You pay premiums to the insurance carrier, and in return you are given certain contractual guarantees and periodic payments in the future.

Premiums can be a series of payments or one lump sum. The payments you receive can be over different periods of time. Be sure to educate yourself on the options available to you.

Guaranteed death benefit & tax deferment – Fixed index annuities offer tax-deferred fund growth. They also provide guaranteed death benefits for beneficiaries. Other benefits may be included, but these are often dependent on specific annuity products.

Help a Click Away at
Via, you can connect with a financial professional, schedule a no-obligation consultation to discuss your goals, and see if an annuity is right for you. With its benefit of wealth protection and guaranteed income, a fixed index annuity may help you secure the lifestyle of your dreams in retirement. We invite you to speak with a financial professional to get started.

Use our Find a Licensed Advisor section to connect directly with an independent financial professional, and to request a personal strategy session to discuss your needs and goals. And should you have any questions or concerns, call 877.476.9723.

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