what are Fixed Index Annuities?

​Fixed annuities provide a minimum guaranteed interest rate. If the insurance company believes it can pay extra interest from their general account, above and beyond its minimum guarantee, it uses the extra interest to link the earning of interest to the performance of an external index for the period.

The major difference between a fixed rate annuity and a fixed index annuity is in the crediting of excess interest above the minimum guarantee. Fixed index annuities link the interest paid to the performance of an index and state what your participation in the index will be.

Learn The Basics: Fixed Index Annuities 101​

Fixed Vs. Variable annuities

The differences between variable annuities and fixed annuities are significant. In a variable annuity, because your income or account value is based on the value of the stocks or bonds backing the annuity assets, the income and/or account values fluctuate. When you read or hear about annuities in the media, most of the time the subject is VARIABLE annuities NOT FIXED annuities. 

Unlike with fixed annuities, the annuity owner bears the investment risk with variable annuities. Therefore, variable annuities are considered investment securities and would be a “risk money place” for your money.

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CONSUMER'S GUIDE:
​How to Generate Lifetime Income with Fixed Annuities

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