An introduction to fixed indexed annuities, including key features, benefits, and considerations.
OTHER LINKS:
Fixed Indexed Annuities, More Potential While Maintaining Protection: [ Ссылка ]
Annuity Beach Reads Part Two, Fixed Indexed Annuities: [ Ссылка ]
Getting Started with Annuities: [ Ссылка ]
TRANSCRIPT:
Have you ever wanted to fully protect your principal from market loss,
while using it to generate guaranteed income,
and still have the opportunity for growth,
all tax-deferred?
Well, you can do all those things
with one financial product.
It's called a Fixed IndexedAnnuity, or FIA.
An FIA is a tax-deferred insurance product,
designed for the long term.
It combines the upside opportunity of market performance
with protection against market loss.
And, it can be fine-tuned to provide lifetime income
and growth potential to meet your needs.
An FIA creates an opportunity for growth by generating interest on a tax-deferred basis in two ways:
One, a fixed rate strategy,
providing a pre-defined rate of interest, and
Two, an index-based strategy,
which is dependent on the performance of one or more market indices.
Let’s take a closer look.
What percentage of your principal do you want to allocate to each strategy?
•The amount you invest in the fixed rate strategy is guaranteed to grow at its stated fixed rate, even if the market goes down.
•The amount you invest in the index-based strategy will grow based on the market performance of your selected index or indices. While your money is not actually invested in the chosen index, interest is earned based on the index’s performance. When the index is down, the issuing insurer fully guarantees your principal against market loss; and, when the index is up, you gain interest from its growth.
What’s more, your interest, combined with tax deferral,
means you benefit from Triple Compounding.
First: Your principal earns interest.
Second: That interest earns interest.
Third: The money you would have otherwise paid in taxes earns interest.
In addition to the tax-deferred interest accumulation, Fixed IndexedAnnuities may also include optional benefits, called riders, to activate guaranteed lifetime income or help create a legacy with death benefit proceeds. We’ll revisit riders and other FIA features, including their costs, in upcoming videos.
To recap the general benefits of an FIA:
•the issuing insurer fully protects your principal from market loss,
•while giving you the opportunity to participate in market upside
•with the option of generating guaranteed lifetime income,
•all tax-deferred, ,until distributions are made.
In order to provide principal protection,
there are clearly defined limitations
that can restrict how much you participate
in the growth of the underlying index.
And, like all investments, there are key risks you should be aware of.
For example, an FIA is designed as a buy-and-hold financial product,
so early withdrawal may incur certain fees or tax penalties.
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