Apr 10
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Equity Indexed Annuities
Equity Indexed Annuities is an evolution of fixed annuities and variable annuities, allowing the client the benefits of both. The equity indexed annuity provides the same security as the fixed annuity in that the client principle is guaranteed against loss, there is no market risk. However, the equity indexed annuity differs from the fixed annuity and is similar to the variable annuity in that it allows you to take advantage of market gains up to a cap, providing a defense against inflation.
Equity indexed annuities can also offer the same guaranteed income riders found in both the fixed annuities and variable annuities. These income riders come with a small cost usually less than 1% and somewhere around .4% to .7%. The income riders provide for guaranteed income growth regardless of any market performance. However, the equity indexed annuities are treated like fixed annuities in that there are no fees unless you opt for the income rider which at that point is minimal and much less than you would incur through a variable annuity or mutual fund and without the market risk.
The way it works, is whatever money you put into an equity indexed annuity is guaranteed against market risk and whatever growth you receive in your equity indexed annuity is guaranteed against market risk, so you can never lose money or go backward. However, the growth is tied to an index like the S&P 500, Dow Jones Industrial Average, The NASDQ or even global indexes or a blend of indexes providing more diversification.
The equity indexed annuity will have different caps on the growth for a given period of time(daily, monthly, annually ECT.) depending on the company or option you choose. In addition, many equity indexed annuities offer a minimum guarantee called a floor.
We believe this can be a great tool to provide guarantees as well as take advantage of market growth. However, this like any retirement savings vehicle may not be suitable for every client so please contact you financial professional, registered investment advisor representative, registered representative of an investment company, life insurance advisor, or other qualified financial professional to determine if the equity indexed annuity is suitable for you.
We provide financial services in Sothern California area in and around Orange County California. Please feel free to Contact Us if you have any questions or would like to determine if the equity indexed annuity is suitable and right for you.
Your Life Advisors
Dean Barwick / Manager (714) 380-4586