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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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.
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.
BANKING AND CREDIT NEWS-June 15, 2016-Voya Financial adds new fixed indexed annuities to suite of retirement solutions
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.
After having released the first quarter sales numbers for indexed annuities, the press began acting like Chicken Little.
Waiting for interest rates to return to normal before investing in fixed indexed annuities may not be in the best interest of clients.
Indexed annuities have sold extremely well in the past three years, and American Equity is one of the top sellers.
According to Jeremy Alexander, CEO of Beacon Research, this is at least in part due to "the lifetime withdrawal benefits offered by most indexed annuities.
Court of Appeals in the summer of 2010--would have defined indexed annuities as securities and moved them from the state's hands into the purview of the federal government.
WASHINGTON -- A coalition of insurance companies and independent marketing organizations has filed suit in federal court to overturn Rule 151A, the newly published rule by the Securities and Exchange Commission that classifies indexed annuities as securities.