Annuities
Fixed indexed annuities that credit interest using a market-index formula — with a floor that is typically zero — rather than putting your premium directly in stocks.
An indexed annuity does not buy the S&P 500. It uses an index to calculate an interest credit, usually with a cap, a participation rate, and a floor. In a down year you typically earn nothing for that period — you are not supposed to lose premium to the market.
Fixed indexed annuities (FIAs) sit between a declared-rate annuity and a market account. Your premium stays with the insurer. Credits are based on an index formula the carrier controls. Caps, spreads, and participation rates can change. That is why we read the contract, not the illustration. Some contracts add a lifetime-income rider for a fee. That rider is a separate decision from the accumulation story. Indexed annuities are insurance products, not securities. They are not FDIC insured. They have surrender charges and limited liquidity. They are a fit when you want some link to index performance, a floor against market loss of principal, and you can leave the money for the term. They are a poor fit if you need the money next year or you want uncapped equity returns.
Who this is for
What it typically covers
A simple example
A 58-year-old moves a portion of savings into an FIA with a 0% floor. In a strong index year the credit is capped. In a down year that slice does not take the market loss. The rest of the portfolio can stay invested elsewhere.
Good to know
Annuities are insurance contracts, not bank deposits and not FDIC insured. Guarantees depend on the issuing insurer. Surrender charges, limited liquidity, and tax on gains can apply. This is not investment, tax, or legal advice.
Guides
Guide
MYGAs, fixed indexed annuities, SPIAs, and DIAs. What each contract actually does, and what it is not.
Read guide