Is An Index Annuity Fixed Or Variable?

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2 responses to “Is An Index Annuity Fixed Or Variable?”

1. 

   February 7, 2015

   Jim Winkler

   That is a great question! An annuity can be really sorted out into two types – A variable annuity, which has an interest rate that can go all over the board; and a fixed annuity, which pays a specified rate of interest. An indexed annuity is really a fixed annuity, as each interest crediting strategy clearly defines the interest that it will pay, depending upon the market it is tied to’s performance. While the interest paid can vary based upon that performance, it is generally defined by caps, participation rates, and floors, so you know what it will pay within those parameters. I hope that helps, thanks for asking!
2. 

   February 1, 2015

   Terry A. McCarthy, CLU, ChFC

   An indexed annuity was initially a method to make the market participation of a variable annuity available to the fixed and guaranteed marketplace. The appropriate name for a “index annuity” is an Equity Indexed Annuities (EIA). The idea of a variable indexed annuity is unusual but Allianz actually is offering a product with the name “Index Advantage Variable Annuity”. According to the Securities and Exchange Commission, there are three types of annuities. There are fixed, indexed or variable annuities. The vast bulk of indexed annuities are not registered with the SEC and are therefore considered “fixed”. Without more information to help you’ll have to accept that an indexed annuity is probably a fixed product but some carriers are creating variable indexed annuities.