Fixed Indexed Annuities - Are They An excellent Expenditure

Are set indexed annuities an excellent expense for you personally? Possibly! It seriously relies upon on your own scenario.

To start with things Financial planner first...

What exactly is a hard and fast indexed annuity? Most standard fixed annuities work quite a bit like CD's. The real difference together with the indexed annuity is that the fee of return just isn't set.

How does an indexed annuity pay out?

The desire is compensated according to the overall performance an Index. There are plenty of but let's use the S&P 500 index for example. If the index goes up 15% theoretically you would earn 15%. If the index goes down, you would earn 0% but have no loss. The difference comes in because very few indexed annuities actually work like this. For instance, you could have a cap - index up 15% you earn 7%. The cap was 7%. This is just one example. You can find literally hundreds of different variations as to how the interest is actually paid out. Be sure to read the details.

Are fixed indexed annuities good even with all of these different payment options? Perhaps! It depends on your own condition. There are actually so quite a few options now that they are looking more like a toolbox, a special tool/annuity for a special job/financial scenario. If one of the annuities fits your problem then it can be a near perfect financial investment with no downside risk. Investing in an annuity that does not fit your scenario can be a financial disaster. Financial disasters are not specific just to annuities though. The same can be true with any type of financial investment.

When are fastened index annuities superior? Only if:

1. You have plenty of time until you need access to your money as compared to the surrender charge schedule. Be sure to read the surrender charge schedule thoroughly.

2. You need income or safety along with potential for growth.

3. You understand that it will very likely not perform as well as the general market when the market is fantastic and will likely do much better (with no losses) when the market just isn't so very good.

4. You understand that desire is credited only one time per year.

5. You understand the bonus features.

Also be sure to check the rating of the insurance company. Ratings matter! To learn about insurance company ratings just search insurance company ratings on any search engine to learn about how they function. Then ask what the rating of the insurance company is and ask if that is the top rating. There is no reason to purchase the same annuity from an insurance company with a lower rating especially if there is no real variation between the annuity details.

One last thing to check on would be to look for your state guarantee program. Try a search engine search of - (your state) guarantee limits insurance companies. DO NOT go over these limits on a per contract basis.

Be sure to seek competent advice from your advisors and insurance agents before making any changes to your expense portfolios.

Keith helps all types of investors make sure their investments are safe and secure. He also helps his clients increase their retirement money sometimes doubling or even tripling their monthly income!