The equity indexed annuity is a unique type of fixed annuity that allows an individual to participate in upsides of the stock market, without ever risking the loss of their principal due to unexpected market changes. An equity indexed annuity also guarantees a minimum interest rate regardless of future performance, with each insurance company using a different formula to calculate the rate guarantees they offer to investors.
The equity indexed annuity was created approximately ten years ago by insurance companies to meet the interests of active seniors who wanted more from their fixed interest products. While the stock market offers opportunities for higher returns, that upside always comes with potential risk. For conservative investments, fixed interest products prioritize safety and protection of principal, but that comes with the promise of lower returns. The equity indexed annuity was designed to provide a middle ground where performance meets safety and investors can experience the best of both worlds.
The equity indexed annuity can track a preferred stock market index, such as the S&P 500, NASDAQ, or Dow, with the rate of return usually being a set percentage of the increase the index shows over a set period, or a guaranteed minimum interest rate (whichever is higher). That makes the equity indexed annuity a very attractive annuity for many investors because the principal investment is protected and guaranteed from loss, while gains are locked in periodically to add to the total return.
Equity indexed annuity companies calculate their rate guarantees by formulating different components relating to the products they offer. This can include the minimum amount you are guaranteed to earn, the maximum amount you can earn, the total percentage of upward movement you can participate in, and what you can do with your accumulated funds once the annuity terms is over. For any equity indexed annuity, it is important to clearly understand how the annuity works, to ensure your selection is best suited to meet your future retirement needs.
affordable and equity indexed annuity quote available for the following states in the USA:
Alabama - AL, Alaska - AK, Arizona - AZ, Arkansas - AR, California - CA,
Colorado - CO, Connecticut - CT, Delaware - DE, District of Columbia - DC,
Florida - FL, Georgia - GA, Hawaii - HI, Idaho - ID, Illinois - IL,
Indiana - IN, Iowa - IA, Kansas - KS, Kentucky - KY, Louisiana - LA, Maine
- ME, Maryland - MD, Massachusetts - MA, Michigan - MI, Minnesota - MN,
Mississippi - MS, Missouri - MO, Montana - MT, Nebraska - NE, Nevada - NV,
New Hampshire - NH, New Jersey - NJ, New Mexico - NM, New York - NY, North
Carolina - NC, North Dakota - ND, Ohio - OH, Oklahoma - OK, Oregon - OR,
Pennsylvania - PA, Rhode Island - RI, South Carolina - SC, South Dakota -
SD, Tennessee - TN, Texas - TX, Utah - UT, Vermont - VT, Virginia - VA,
Washington - WA, West Virginia - WV, Wisconsin - WI, Wyoming - WY.