Understanding the Different Types of Annuities
Annuities are financial products that provide a steady income stream, typically used for retirement.
Below, we explain the three main types of annuities: Fixed, Variable, and Indexed Annuities.
Fixed Annuities
Fixed annuities provide a guaranteed interest rate for a specified period. The insurance company agrees to pay you a set amount of interest, which is not affected by market fluctuations. This makes fixed annuities a safe option for those looking for stability and predictable returns. They are often used by individuals who want to preserve their capital and ensure a steady income during retirement.
Variable Annuities
Variable annuities allow you to invest in a selection of sub-accounts, which are similar to mutual funds. The value of your annuity and the income it produces can fluctuate based on the performance of these investments. While variable annuities offer the potential for higher returns, they also come with higher risks compared to fixed annuities. They are suitable for individuals who are willing to take on some investment risk in exchange for the possibility of greater growth.
Indexed Annuities
Indexed annuities offer returns that are linked to the performance of a specific market index, such as the S&P 500. They provide a middle ground between fixed and variable annuities by offering some of the growth potential of the market while also protecting against loss. Indexed annuities typically have a minimum guaranteed interest rate, ensuring that you won’t lose your principal, but they also cap the maximum returns you can earn.
If you would like to purchase and annuity or have an agent contact you
Click HereYour information will be kept secure - Your information will NOT be sold to a marketing company - You will NOT receive SPAM emails or phone calls - You will be contacted by ONE professional who will answer your questions or prepare your individualized quote. Take action now.