Equity Indexed Annuities

Indexed (or Equity Indexed) Annuities

-*fixed annuities* that invest on a relatively aggressive basis to aim for better returns -like a normal FA, they have a guaranteed minimum interest rate -the *current index rate* that is actually credited, if above the minimum, is often tied to a familiar index (e.g. S&P500)

Payout

-generally the insurer's reserve the initial returns for themselves, but pay the excess to the annuitant -e.g. the company may keep the first 4%, but any accumulation in excess of that is credited to the annuitant's account

Risk Level

-less risky than a VA or mutual fund -expected to earn higher interest than an FA