What it is
A fixed index annuity is an insurance contract that may earn interest based partly on an index while protecting contract value from direct market losses, subject to contract terms.
Potential uses
- Tax-deferred long-term accumulation
- Retirement-income planning
- Reducing direct exposure to market downturns
Things to consider
- Surrender periods and charges may apply
- Index-linked interest is limited by contract terms
- Guarantees rely on the claims-paying ability of the insurer