Fixed Index Annuities are excellent investment vehicles, as they allow you to enjoy the benefits of market-linked interest, but without being affected by market risks. These annuities are also known as annuities and are investments that are insured and are going to be tied to the interest rate which in turn is affected by how the main stock index grows. S&P 500 is an example of these indices.
When the S&P 500 rises, the insurance company will credit your account. However, the insurer will also first subtract its own cut from the amount that will be credited to your account. On the other hand, if there is a drop in the S&P 500, the insurer will protect the amount you have invested against possible loss with a reduced but positive interest rate. These features have ensured that this type of investment vehicle is safe and therefore more popular.
Fixed index annuities combine the security of a guaranteed interest rate with the opportunity to earn additional interest that is linked to the returns of particular indexes. There are several good reasons to opt for this type of investment. For one, you will be able to take advantage of many income options. You have the right to choose when to make your investment and you can also choose the guaranteed income option.
These investments will also provide you with a death benefit defense. The value of that investment (including accrued interest less withdrawals) will be passed to your beneficiaries in the event you die before receiving payments from your income.
There are different types of fixed index annuities. Each annuity is different from the next. You can opt for the S&P 500 index and you can also choose a combination of different indices. You can also choose how and when interest is measured (linked index) and credited to your account.
All of this goes to show that Fixed Index Annuities are there to give you a constant and guaranteed rate of growth over a longer period and you can also benefit from getting a larger accumulation that will be linked to a particular index. Such an investment option suits those who have already retired and also those who are about to retire. The main benefit you get by opting for this type of investment is that you can safely grow your assets.
Fixed index annuities are basically a combination of investment with insurance and are different from other types of annuities in the way that interest is credited to your account. These annuities will credit interest to account holders based on how a certain index moves.
These investment vehicles give you a higher degree of security, but at the same time you also have the opportunity to earn interest above the fixed interest rate. All you have to wait is for the stock index to grow enough to help you get better interest rates.