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.
Need help generating guaranteed lifetime income for your retirement?
ASK US A FINANCIAL QUESTION
2441 Mountain Road, Suite F
Pasadena, MD 21122
Need Help Making a Financial Decision?
We do not warrant anything on this website, although we hope everything is accurate. We do not provide legal advice. We are not responsible for any independent decisions made from information found on this website or links provided to external websites. You need to conduct your own research and consult with a financial professional about your personal situation before making any financial decisions.
INFORMATION CONCERNING COPYRIGHT INFRINGEMENT CLAIMS:
We provide links from its website to various third party sites which may enable you to obtain locations and information outside of our control. We neither control nor endorse such other websites, nor have we reviewed or approved any content appearing on them. We do not assume any responsibility or liability for any materials available at these websites, or for the completeness, availability, accuracy, legality or decency of these sites.
© 2021 SMP International LLC