Fixed Index Annuities can provide safe growth and lifetime income
FIAs credit tax-deferred interest growth based on the performance of an index like the S&P 500 or Dow Jones—without any risk of market loss in value. In years that the index tied to the annuity increases, the fixed index annuity applies interest credit to the account value based on predetermined formulas that vary from one indexed annuity to the next. And, each fixed index annuity can have multiple crediting methods to choose from. All fixed index annuities function differently, but all protect the account from any downturns in the economy or the associated indexes. And, the credited growth accumulates without taxation for as long as the money remains in the policy. Only when the funds are taken out are taxes applied—and then only applied to the growth amount. Lifetime income is usually achieved via a lifetime income rider, but can also be achieved by annuitizing the contract.
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