Indexed Annuities

Indexed annuities are financial products that combine elements of both fixed and variable annuities. These annuities offer the potential for returns linked to the performance of a specific market index, such as the S&P 500, while also providing a minimum guaranteed interest rate. Unlike variable annuities, where returns are directly tied to investment performance, indexed annuities offer a level of downside protection through the guaranteed minimum interest rate. The potential for higher returns comes from the participation rate or cap imposed on the credited interest, limiting the extent to which the annuity benefits from positive market movements. Indexed annuities are often chosen by individuals seeking a balance between market participation and capital preservation. It's important for investors to carefully review the terms, limitations, and fees associated with indexed annuities, as they can vary among different products and insurance providers.