What is an annuity?

An annuity is simply a contract between you and an insurance company. You pay the insurance company one or more purchase payments (“premium”). In exchange, you get the benefits the insurance company guarantees through your annuity contract.

What is a fixed index annuity?

A fixed index annuity is a contract between you and an insurance company. In exchange for the money you place in your annuity, the insurance company guarantees several benefits – including a steady stream of retirement income. And because it’s designed to help you prepare for retirement, a fixed index annuity provides certain tax advantages as well.

Six reasons to consider a fixed index annuity (FIA)

1

Accumulate for retirement

FIAs offer the potential to earn interest based on changes in an external index. Annuities give you a choice of several indexes and even some offer exclusive index options.

2

Protect your principal

Your contract can earn interest based on an external index, but you’re not actually buying any stocks or shares of an index. This means the money in your FIA (your “principal”) is not at risk due to market losses.

3

Grow tax-deferred

You don’t pay taxes on the interest your annuity earns until you take money out. This helps compound your interest, so the money in your contract can accumulate faster.

4

Get flexibility

Some FIAs offer riders (either built in or at an additional cost) to help you address specific needs. They also offer a variety of crediting methods and flexible options for receiving income.

5

Receive guaranteed income

Annuities are designed to provide a reliable stream of retirement income, either for a set period or for as long as you live. Some FIAs even offer you the potential to get increasing income.

6

Leave a legacy

FIAs pay your loved ones a death benefit if you pass away before you start taking scheduled annuity payments. (And, if properly structured, the death benefit is not subject to probate.)