Fixed Indexed Annuities Are They A Fantastic Investment

Are fixed indexed annuities a superb investment for you? Possibly! It truly will depend on your circumstance.

1st issues very first...

What's a fixed indexed annuity? Most typical fixed annuities perform a whole lot like CD's. The distinction together with the indexed annuity is the fact that the rate of return is not fixed.

How does an indexed annuity pay?

The interest is paid depending on the performance an Index. You will discover several but let's make use of 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 perform like this. For instance, you could have a cap - index up 15% you earn 7%. The cap was 7%. This is just one example. There are actually literally hundreds of different variations as to how the interest is actually paid out. Be sure to read the details.

Are fixed indexed annuities great even with all of these different payment options? Maybe! It depends on your situation. You can find so many options now that they are looking more like a toolbox, a special tool/annuity for a special job/financial predicament. If one of the annuities fits your scenario then it can be a near perfect 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 investment.

When are fixed index annuities excellent? 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 great and will likely do much better (with no losses) when the market is just not so good.

4. You understand that interest 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 distinction 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 investment 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!

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