The index annuity protects your savings against losses, making it a relatively safe investment. You get some market upside with less of the risk. Potential preservation of market gains. Your contract could lock in your gains periodically, like once a year.
An index annuity is sort of a hybrid of a fixed and variable annuity. Indexed annuities offer protection against market drops, but they also don’t offer much benefit if the market rises.
- Moderate return potential. By investing your money in stock market indexes, an index annuity can have a decent long-term return, potentially better than what’d you receive through a bank certificate of deposit (CD), fixed annuities and savings accounts.
- Protection against market losses. The index annuity protects your savings against losses, making it a relatively safe investment. You get some market upside with less of the risk.
- Potential preservation of market gains. Your contract could lock in your gains periodically, like once a year. That way you don’t have to worry about future market downturns erasing your earnings.
- Inflation protection. The historic long-term return of the stock market is higher than inflation, so index annuities can protect the future buying power of your savings.
