How do Equity Index Annuities work?
How would you like to have your invested assets linked to an Index without any exposure to risk? Now you can.
If you owned an Equity Index Annuity in 2008, you would not have lost one penny in the stock market. If the market starts to rebound in 2009, you will participate in those gains
You are GUARANTEED not to lose any of your principal
Possibly the most attractive provision of equity index annuities is the no-loss provision. No matter what happens to the stock market, your funds are fully guaranteed to never lose money! Plus any gain recorded in the annuity (anniversary) now becomes fully locked in and those funds are also guaranteed to never lose value. The return you receive can only go up. You are guaranteed a minimum profit on your money..
Competitive Rates of Return
Concerns over inflation and making sure our future dollars are available to us for our retirement and other needs is essential. It becomes important to consider how the S&P 500 Stock Index has performed historically. Look at these returns over the past 20 years of the S&P 500 Stock Index.
5 years average rate of return 9.23%
10 years average rate of return 8.18%
20 years average rate of return 15.7%
Source is Yahoo Finance
In the last 20 years, 5 years have been down years and 15 have been up years.
Equity linked indexed annuities only participate in up years and are protected against loss in down years.
Traditional Annuity Benefits
Equity index annuities offer the same benefits as traditional annuities such as these features:
- Tax deferred growth
- Transfer directly to heirs without probate
- Access to your funds
- Conversion at anytime to an income of any period, even lifetime!
Your Return Can Only Go Up – It Is Always A bull Market
With indexed linked annuities you only participate with the bulls (increase) and never hide with the bears(decreasing.)2008 was a very tough year for the stock market. If you owned an Index Annuity you would not have lost one penny of principal. In 2009, the market is likely to rebound somewhat from the lows in 2008. You will participate in any gains but not participate in the losses
Overall, equity index annuities are single-premium annuities that are performance-linked to the S&P 500 Stock Index. They guarantee security of principal and credited interest, and many don’t have a cap on earnings. When you consider the performance of the S&P 500, these annuities look even better.
How is Your Annuity Company Rated
Guarantees are provided by the issuing insurance company and are state specific. Each state regulates and approves contracts issued in that state. The Standard & Poor’s Composite Index of 500 stocks is generally considered representative of the U.S. stock market however actual performance of any index is not indicative of the performance of any particular investment.
Annuity Benefits
All annuities have three primary advantages: Tax Deferral, Avoidance of Probate, and a Guaranteed Income (except variable rate annuities) for a fixed period of time, or income for life.
More specific reasons to invest in Index annuities:
- You need to safely create wealth for your heirs
- You need tax-deferred growth
- You need your principal and interest guaranteed
- You need your heirs to avoid probate upon your death
- You need an increased death benefit
- You need stock-market linked gains without the downside risk
- You have money that is designated for inheritance
Want More Information?
Simply fill out the contact form on this page and a representative from Fink Insurance Agency will provide a free, no-obligation consultation.
