What is a Fixed Index Annuity?
A fixed index annuity is a contract between you and an insurance company. Index annuities pay interest based on changes in an index, such as the S&P 500. As long as the index is positive, you are credited with interest. However, you do not lose money if the index is negative. Your principal is fixed annually. It does not fluctuate with the market. A fixed index annuity can help you accumulate money for retirement and guarantee a regular income when you retire.
Who’s Who in a Fixed Indexed Annuity?
Generally, there are four parties involved in fixed index annuities contracts:
Life insurance companies issue annuities. In addition, they guarantee the annuities.
Contractor owners are the individuals who purchase the annuity.
Annuitants and owners are often the same individuals, though not always. Life expectancy determines when and how much an annuitant will receive.
When you die, your beneficiary receives your death benefit. Your annuity will go through probate if you don’t name a beneficiary.
Finding a Retirement Professional
A single retirement strategy does not fit all. A good financial strategy can make all the difference. Reliance Retirement Services helps clients protect their retirement income. Every advisor is different. As a team, we understand the importance of protecting your retirement funds. Our team can explain fixed index annuities in more detail.
