What are Fixed Index Annuities?

Fixed index annuities are a solution that makes sense for many of our Florida clients who want to generate a predictable income for their retirement years. With indexed annuities, many of our clients have been able to get closer to financial stability.

Before we describe fixed index annuities, let’s review the basics of annuities. Basically, there are four types of annuities: immediate, fixed, variable and fixed index. All annuities are an insurance contract between an individual and a financial institution. The individual pays a premium that will, at a predetermined time, be returned back to the individual as incremental payments or as a lump sum. In most cases, any principal paid into an annuity is tax-deferred.
So what are fixed index annuities? This type of annuity accumulates interest based on the performance of a specific financial index, such as Nasdaq or the S&P 500. Therefore, fixed index annuities have the potential to earn a higher, market-linked interest rate with less exposure to risks associated with the stock market because although an external index or indexes may affect policy values, the policy does not directly participate in any stock or equity investments.

Upside growth potential

  • Guaranteed principal protection
  • The power of tax deferral
  • Lifetime income
  • Beneficiary protection