Product Features

In general, fixed annuity yields are currently higher than CDs and bonds. It's also expected that the US will have a low-interest-rate environment for a while. Whenever fixed annuities pay higher rates than other safe investments, they are worth considering.

Of the four methods – annual reset, point-to-point, high water mark, and averaging – most people will probably do better with averaging. The value of the index is taken at different points during the year and averaged to allow for a smoothing of both increases and decreases. Each crediting method is usually better than another under certain market conditions, making it difficult to pick an all-around 'best'.

Fixed annuity interest rates correlate to national interest rates when you sign the contract, so it's generally better to buy a fixed annuity when interest rates are high. Even though fixed-rate annuities generally lock in a pre-defined interest rate, this lock doesn't always work in your favor. If interest rates rise, you incur the opportunity cost of not earning more with another investment. Further, the amount of interest paid might not keep pace with inflation.

A Cap is a limit on the amount a policy owner can earn in a given year. For example, a Cap of 6% means the potential maximum annual return would be 6%. A Participation Rate is simply the percentage of an index that is used to calculate the return that a policy provides. For example, assume that a given crediting method results in an 10% interest credit. If the participation rate is 70%, then the final level of interest credited to the contract owner is 7% (70 percent of 10%).

The potential returns of an annuity depends on the terms and conditions of each particular contract. The terms of some annuities may result in lower potential returns, and the terms of other annuities may allow higher potential returns. We believe that for many investors, uncapped FIAs provide the best opportunity for potential return, though the appropriate contract will depend on your specific circumstances, objectives and risk tolerance.

{"answer":["If you have an income based annuity, most insurance companies do not publish an interest rate. They only provide you with the income amount.","If you purchase a Fixed Index Annuity, your interest rate is not guaranteed, but it will never be lower than zero. It depends how the index or indices you are tracking perform. An annuity quote will normally show you guaranteed values and hypothetical values based on the past performance of your chosen index."],"reminder":"\Reminder: An annuity's interest rate on the market value side may be less important than the interest rate of the Benefit Base side of the annuity. If your interest on the Benefit Base is guaranteed to rise 5-7% that may be more important than the growth on the market value.

The fixed amount that is paid each year is often adjusted based on current interest rates. And, most insurance companies offer a fixed rate of return that the payouts will not fall below. To ensure that distributions keep pace with inflation, consider an annuity with a cost of living adjustment.

{"subtitle":"Some annuities have a market value adjustment (MVA) assessed if you withdraw more than the allowable amount.","answer":["Essentially, a market value adjustment compares current interest rates against the interest rate at the time you started your annuity. If rates have gone up, your annuity rate is worth less and you will be penalized for that. But, if rates have gone down, your annuity is worth even more and you will benefit from the MVA. Some insurance companies cap the amount you can lose or benefit through an MVA.","If you do not withdraw more than the allowable amount, you will not be assessed for an MVA."]}

每年都通过将合同年末的指数值与合同年初的指数值进行比较来确定与指数挂钩的利息。 在该期限内, 利息将每年添加到您的年金中。

Index-linked interest, if any, is determined each year by comparing the index value at the end of the contract year with the index value at the start of the contract year. Annual Reset also locks in any interest your contract earned during the year. Without this important feature, your years of profit could be wiped out in just one bad year like in 2008.