Fixed index annuities, or FIAs, are a contract between you and an insurance company that may help you reach your long-term financial goals. In exchange for your premium payment, the insurance company provides you income, either starting immediately or at some time in the future. In addition, FIAs offer the potential for indexed interest based on changes in select indices.
// WHY ARE THEY CALLED FIXED INDEX ANNUITIES?
Fixed: You can be guaranteed a minimum rate of return from your contract.
Index: Unlike traditional fixed annuities, fixed index annuities allows you to take advantage of market upside with interest credits based on changes in select indices, such as the S&P 500 or the DJIA.¹
Annuity: An annuity is a contract between you and an insurance company. In exchange for paying an initial premium, the insurance company offers you regular income payments, either starting now, or down the road.
// WHO IS INVOLVED IN FIXED INDEX ANNUITies?
The Insurance Company issues the annuity and is responsible for backing its guarantees.
The Annuitant’s life expectancy is used to calculate payments; the Contract Owner makes decisions regarding the annuity. These may be the same person, or not.
The Beneficiary receives the death beneﬁt of the annuity. Without them, the annuity may be subject to probate. If beneﬁciaries are deﬁned, the proceeds will pass to them without probate.
// HOW DO FIXED INDEX ANNUITIES WORK?