How Do Fixed Indexed Annuities Work Video Course

Annuities can be complicated. Our free and quick video series makes them easy to understand. Learn how an FIA fits into your retirement plan. Or enroll in the interactive online course with virtual quizzes on our consumer-friendly education center.

A

What Is An Annuity?

 

An annuity is an insurance product that helps turn your assets into income. It's designed to help convert your savings into a stream of income, helping to make your financial plans during retirement more predictable.

B

What Is A Fixed Annuity?

 

A fixed indexed annuity is a tax deferred accumulation product offered by an insurance company. It provides principal protection in a down market and still gives the owner an opportunity to earn interest on their contract value when the market goes up.

C

Can I Get A Refund?

 

Can you change your mind about purchasing an annuity and get a refund? During the free look period, you can change your mind without penalty. Depending on the state in which you live, you will generally have between 10 and 45 days.

D

What Does The Contract Value Grow?

 

Contract value is the value of your annuity contract at a specific point in time. When an annuity contract is issued, the contract value will equal your premium. Some contracts may include a premium bonus, which may increase your contract value at issue, or over a certain number of years.

E

How Do Indexed Accounts Work?

 

In exchange for providing downside protection on indexed accounts, an insurance carrier limits some of the upside potential, should the market grow. Generally, insurance companies limit growth through three levers, cap rates, participation rates, or spreads. A strategy fee may also apply. Let's take a look at each of these terms.

F

Can I Withdraw Money?

 

Life is full of surprises, and you may need or want to access the money in your account earlier than expected. You can withdraw money from your annuity at any time. It's important to note however, that withdrawing money from your annuity before the surrender charge period ends may result in surrender charges, a negative or positive market value adjustment or MVA, pro-rated fees, and less interest credited to your contract.

G

What Are Surrender Charges?

 

Surrender charges are assessed if you choose to take a withdrawal in excess of any free withdrawal amount provided by your contract. The free withdrawal amount is generally an amount you may withdraw from your annuity contract each year without incurring any charges or adjustments. Surrender charges are typically expressed as a percentage of your premium of core contract value withdrawn.