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Pros and Cons of the Indexed Annuity

The Index Annuity is the hybrid of the annuity world. Its design is simple – Give the investor a potential to make a decent interest rate while protecting the investment. That’s It!

Here is a list of upsides to an Indexed Annuity:

  • Index Annuities generally have no annual fee or cost
  • Index Annuities have zero market risk
  • Index Annuities can have high earning potential
  • Index Annuities generally contain an annual reset (your gains are locked in each year)
  • Index Annuities are offered in contracts as short as four years
  • Index Annuities generally offer more competitive rates than CD’s
  • Index Annuities can offer lifetime income
Here is a list of downsides to Index Annuities
  • Indexed Annuities can penalize you for taking out money prematurely
  • Indexed Annuities can have very long surrender schedules
  • Indexed Annuities can limit your earning potential
An Indexed Annuity is a moderately conservative investment. Some offer income riders that can grow your money at a fixed interest rate of 8%. Some offer bonuses that allow you to quickly bandage a previous market loss. If you would like to see which Indexed Annuity is right for you. Click Here