Fixed
Annuity
Experts
New
Technology
-
Old Fashion Service
-
800-373-9697
Deferred, Fixed
Indexed, & Immediate Annuity rates, quotes and sales.
|
|
|
|
Equity Indexed AnnuityUpside Potential Without Risk to PrincipalInsurance companies have introduced products that credit interest based on a stock market like environment but with no risk to principal. If it is a market up year interest is credited and locked in, if a down year no interest is credited, past gains are protected and the crediting index resets at current market level. The products are "equity-indexed" fixed annuities, not mutual funds. In fact, they aren't defined as securities, but rather as insurance policies. The concept behind indexed annuities is fairly simple. The insurance company guarantees your principal won't drop even if the stock market does. But if prices rise, the insurer shares some of the profits with you. There are other benefits associated with fixed annuities, such as tax-deferred compounding, penalty-free withdrawals, nursing home waivers, a minimum guarantee of earnings. Tax penalties and surrender charges for premature withdrawals might apply. Choose a term from 1 - 15 years. A Win-Win Way To Be Linked To A MarketYou invest your money, as little as $50 a month or $5,000 one time, and if the stock market goes up, you win. If the market goes down, you don't lose. Too good to be true? Well, it's true, being offered and guaranteed by AAA insurance companies. I'm talking about a relatively new product in the market, the equity-indexed annuity. These products offer to pay depositors a percentage of the gain in a stock market linked index while guaranteeing they will make a gain even if the market is down every year if they leave their money in for the full term. (Terms from 1 - 15 years) "You can have the best of both worlds, stock market type return with NO risk of principal. You must be willing to tie up your money - $5,000 minimum - for a while (7-15years) you decide. As with all annuities, you defer income tax on your earnings, but usually must pay a tax penalty if you take your money out before age 59 1/2. AnnuityExperts.com only represents the top rated insurance carriers. "Nothing is free," said David Behrens, a Lincoln Benefit Life vice president. "There has to be a trade-off between risk and reward." The trade-off for a guaranteed principal is a lower return than what investors have obtained, historically, by putting their money into stocks. (3% to 4% less on average) "This product is not going to give you the same kind of return as investing in an equity index fund," agreed Michael Mulkern, national marketing manager for Keyport Life. "But we are looking for people who wouldn't buy that type of fund." Equity Index Annuities are a "bridge" between a fixed annuity, which like a CD, guarantees a set rate of return for a set number of years, and a variable annuity, in which the return depends on the performance of underlying mutual funds, and the investor risks losing money. Buyers are typically people in the late 50s or early 60s who don't want to take chances with their retirement money. They can now lock in there gains and if the market continues up the will continue up if the market drops the are completely protected. We want to make sure our clients are aware this is a long-term investment. Most Equity Indexed annuities allow you to take everything out without company penalty if you become confined to a long-term care facility after a period of time. Usually 30 - 90 days. On each policy anniversary, you are credited with a percentage of the gain of the Index. |
|
Send mail to
Jeff@annuityexperts.com with
questions or comments about this web site.
|