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‘Index Annuity’ Definition:

An insurance contract (specific type of Fixed Annuity) in which an insurance carrier offers a payment or a series of payments to the annuitant that can fluctuate depending upon the performance of a specified equity-based index. In this contract, the insured pays a life insurance company of lump-sum amount of money at the start of the contract, and then that money plus interest (which is determined by the performance of an equity-based index) is paid back to the insured over a long period of time if the annuitant decides to annuitize the contract or in lump sum if the annuitant decides to pull their money out after the contractual surrender period.

Index Annuities are considered the most complex of the Fixed Annuity family, so it is recommended to do healthy research before making a final decision for or against them. Here are some items that you’ll need to be familiar with to understand how an insurance company can guarantee returns based on equity-based indexes:

  • Annual Reset
  • Annuity Caps
  • Participation Rate
  • Surrender Period

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See below for educational articles across the web about ‘Fixed Index Annuities’:


Annuities: Benefits and Limitations

Annuities are controversial. It’s a love-hate affair in the investment world. Let’s take a closer look at the five most common types of annuities benefits and limitations to determine if a particular annuity is a good option for your financial plan. Fixed Annuities – offer investors a fixed interest rate on their investment for a  Click to Continue


Why do Baby Boomers Love Fixed Annuities?

Annuity sales are at their highest level in three years and fixed annuities have hit sales numbers not seen in five years. What’s behind this trend? Baby boomers. These near retirees have been wise with their money and are increasingly aware of the need for lifetime income sources. Fixed annuities have healthy interest rates when  Click to Continue


What is Annual Reset and Why do I Want it?

This is an educational video brought to you by Retirement Servicing Group and Cal Burgess. This video shows how annual reset can work within either an Indexed Universal Life policy or Fixed Indexed Annuity. This is a core concept within many safe money vehicles designed to protect your money moving forward. Annual reset is the most effective  Click to Continue


What Are Annuities?

You’re a first time investor, female, sixty years old. Your financial planner mentions annuities. You’re thinking, “What are annuities”? The homework begins. An annuity is a contract between you and an insurance company that requires the insurer to make payments to you. A lump-sum payment or a series of payments. Payments either immediately or in  Click to Continue


What Questions You Should Ask Before Purchasing a Fixed Indexed Annuity?

What should you do before sinking your hard earned money into fixed indexed annuities (FIAs)? First, get some background information on FIAs by doing some research. You should understand any financial product before plunking a portion of your retirement savings into it. Armed with that knowledge, here are six questions you should ask before purchasing  Click to Continue


AARP Fixed Index Annuity Article Rebuttal

At Retirement Think Tank, we believe that education is key to making the best retirement planning decisions, so we are happy to see that an article just got published on Annuity123 giving a very detailed rebuttal to an article published on AARP that was overly negative towards fixed index annuities. In this AARP Fixed Index  Click to Continue


Hedging Strategies of Life Insurance Companies Explained

Insurance companies are some of the very best in the world at hedging. Hedging strategies of life insurance companies are complex, but there are some high level terms and process that are fairly easy to understand. Here are the two primary lessons this video will teach you: Learn why returns are different between static and  Click to Continue


What Are Fixed Index Annuities?

Assembling the optimal retirement plan is critical for today’s seniors given that their retirement years will likely be much longer than that of the parents.  Most troubling, is that many of today’s retirees do not have the comfortable pension plans to offset the ever-increasing risk of life longevity (living longer than ones retirement savings can  Click to Continue