| What is a Equity Index Annuity? |
An Equity Index Annuity is an annuity that shares in the upside potential of market returns while eliminating any downside risk in the event of market losses. This enables the buyer to share in market-like returns during a "bull" or up market, while completely protecting the investment from any risk in the event of a "bear" or down market.
| Equity Index Annuities contain all of the following: |
- Tax deferral
- No risk to any premium deposits
- Market-like returns
- Guaranteed minimum returns
- Triple compounding of interest
| Why should I choose an Equity Index Annuity? |
Equity Index Annuities offer a potential increase in interest rate returns by offering options to link those returns to the performance of one or more of the market indeces (usually, but not limited to, the S&P 500). Crediting of those interest returns are a reflection of the performance of the particular indeces chosen. Historically, Equity Indexed products out perform fixed interest annuities, CD's, and/or bonds. They also allow the owner to stay ahead of inflation, locking in gains that can never be lost (usually on an annual basis), and allowing that interest earned to be compounded. Last, Equity Index Annuities are contractually gauranteed to grow at a minimum interest rate. This stated rate provides the protection of your principle and, in some cases, a guaranteed rate of return over the duration of the annuity in addition to protection over flat or negative market returns.
| Are Equity Index Annuities safe? |
Most Equity Index Annuities include contractual surrender penalty waivers for Confinement, Terminal Illness and/or Nursing Home which provide the annuity owner with the accumulated value of the contract if they become confined, terminally ill, or are admitted to a nursing home for a specified period of time. These waivers provide these benefits with no penalty or surrender charges applied to the value. Equity Index Annuities also come with varied withdrawal features that provide access to a certain percentage of the account value, annually, without any penalty. Many Equity Index Annuities also offer a bonus which will provide you with an immediate percentage increase of your account value in addition to the rate of return that the ideces provide. The main feature of Equity index annuities that continues to draw people to utilize them for retirement and investment planning is the reset feature, usually on an annual basis, of the account value that allows the account to credit interest that the policy can never lose. What this means is that once interest or gain has been credited to to your account value, the value of your annuity will never decrease (less withdrawals)...even if the market goes down!!
Equity Index Annuities vary with their different features, liquidity options, and surrender periods and therefore it is important to speak to a qualified, independent representative for guidance when choosing which Insurance carrier and which Equity Index Annuity is right for your specific needs. Please click the link below to have a qualified, independent representative contact you for a free consultation.
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