Indexed AnnuitiesIntroducing Indexed Annuities from the
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What is an Index Annuity?With an index annuity, your money is invested in a fixed account and you may earn additional interest based on the performance of a particular stock index, such as the Standard & Poor's 500 Index, the Dow Jones Industrial Average, the Nasdaq Composite Index, or the Russell 2000 Index.The upside of an index annuity is that you get the best of both worlds — the opportunity to earn money based on a stock performance index and the stability of a fixed account. The downside is that you still essentially have a fixed annuity, and the gains you can make in the contract due to the performance of the stock index are fairly small. An index annuity sometimes pays a guaranteed interest rate for 3, 5 or 7 years depending on the plan selected. At the end of the initial interest rate guarantee period, you have the option to automatically renew for the same period of time at a potentially higher guaranteed rate, due to the index.
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