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WHAT ARE INDEXED ANNUITIES?An indexed annuity is a fixed annuity, either immediate ordeferred, that earns interest or provides benefits that are linked to an external equity reference or an equity index. The value of the index might be tied to a stock or other equity index. One
of the most commonly used indices is the S&P 500, which is an equity index. The value of any index varies from day to day and is not predictable. When you buy an indexed annuity you own an insurance contract. You are not buying shares of any stock or index. 1:35 min. video HOW ARE THEY DIFFERENT FROM OTHER FIXED ANNUITIES? An indexed annuity is different from other fixed annuities because of the way it credits interest to your annuity's value. Some fixed annuities only credit interest calculated at a rate set in the contract. Other fixed annuities also credit interest at rates
set from time to time by the insurance company. Indexed
Annuities credit interest using a formula based on changes
in the index to which the annuity is linked. The formula
decides how the additional interest, if any, is calculated and
credited. How much additional interest you get and when
you get it depends on the features of your particular annuity.
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