Indexed annuity

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Indexed Annuity

An annuity with an interest rate linked to the performance of some index. Most annuities pay the interest rate stated in the contract, but an indexed annuity pays a minimum interest rate (which may be 0%, but never lower), with the possibility of a higher rate depending on the performance of the relevant index. Each plan uses a different methodology in determining how the higher interest rate is calculated. Common features in its calculation include a participation rate, which determines how much of the annuity is linked to the index, and the rate cap, which sets a maximum interest rate on some plans. Many index annuities use the S&P 500 as their benchmark.

Indexed annuity.

An indexed annuity is a deferred annuity whose return is tied to the performance of a particular equity market index.

Your investment principal is usually protected against severe market downturns, in that you may have an annual return of 0% but not less than 0%.

However, earnings are generally capped at a fixed percentage, so any index gains that are above the cap are not reflected in your annual return.

Indexed annuity contracts generally require you to commit your assets for a particular term, such as 5, 10, or 15 years. Some but not all contracts limit your participation rate, which means that only a percentage of your premium has a potential to earn a rate higher than a guaranteed rate.

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SCOTTSDALE, Ariz.: Annexus, a leading designer of indexed annuities and indexed universal life insurance, was named Annuity Innovator of the Year by EQDerivatives.
sales of individual indexed annuities and other non-variable annuities were a little softer in the third quarter than they were in the second quarter.
Available for an additional cost through Lincoln Financial's New Directions 8, OptiBlend 7 and 10, and OptiChoice 5, 7 and 9 fixed indexed annuities, i4LIFE[R] Indexed Advantage helps consumers meet their needs for guaranteed lifetime income.
An IMO financial institution could earn money from insurers for selling indexed annuities to "protected retirement investors," and it could share that ability with its agents.
The annuity, which comes with optional guaranteed income rider, will complement the commissioned-based indexed annuities available on the firm's platform and provide an additional fee-based option.
15| The salesperson that sells you mutual funds most likely does not sell fixed or indexed annuities.
However the best sales quarter for indexed annuities occurred in the same period of last year, resulting in a 4 percent decline for the second quarter 2015.
It seems that every agent I speak with blames the historical low interest rates for their declining sales of fixed and indexed annuities.
Fixed indexed annuities (FIAs) may provide the right balance for clients who are seeking the security of guaranteed retirement income and the ability to enjoy market upside potential without significant loss of control or downside principal risk.
In fact, the current pricing of these riders on indexed annuities guarantees that the policyholder will always have a higher income benefit base than account value.
Indexed annuities have sold extremely well in the past three years, and American Equity is one of the top sellers.
It's been a tough few years for indexed annuities. First, there was Notice to Members 05-50, which warned firms to supervise sales of nonregistered EIAs.