How do Insurance Carriers Use Options to Price Fixed Indexed Annuities

Here at Retirement Think Tank, we are continually asked how the insurance carriers use options and derivatives to price these fixed indexed annuities.  What we have also found is that the majority of consumers (and even many financial advisors) believe that the carriers just invest all of the premium into the indexes and keep any spread above the caps.  In reality, that couldn’t be further from the truth.

Watch this great video that explains exactly how the carriers use options and make money.



Option Pricing For Insurance Carriers – Video

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The articles displayed in are for educational purposes only. Be sure to seek out personalized guidance from a licensed advisor/agent in your state for your insurance, investment, or tax planning needs.

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