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AN INVESTMENT THAT RAISES
WITH STOCKS BUT STILL GUARANTEES YOUR PRINCIPAL!?
How would you like an annuity that pays gains based on the stock market, yet
still guarantees your principal when the market declines? Here’s the
opportunity: Many insurance companies have introduced the indexed annuity.
Many of these annuities have the following features:
1. The interest applied to the account is based on the change in a stock
market index (such as the S&P 500 or Nasdaq 100).
2. If the stock market index goes down, your original principal receives
protection.
3. Many even offer a minimum interest guarantee, in case the market is down
for the entire term of your annuity, so even if the market is down, you make
money.
This could be an alternative for money you currently have in stocks. By
placing this money in an indexed annuity, the original principal receives
protection.
Or perhaps you have money in taxable alternatives such as CDs, or money
market accounts and have been nervous to place this money in the stock
market. With the right (or correct) index annuity, you know that your
principal is protected by the issuing insurance company. Additionally, this
could be a good option for people who already own annuities that are getting
low rates.
If you purchased a deferred annuity in 1988, you may have seen your annuity
drop from 9 or 10% when you first started and now you are getting 2.5-3.5%!
The indexed annuity can be an alternative for people who want to see their
capital grow and want to see it grow without current income taxes.
Note that an indexed annuity may not perform as well as a similarly indexed
stock mutual fund during an increase in the stock market, because indexed
annuities typically provide a percentage (e.g. 80%) of the increase in the
S&P 500. Other methods widely used in calculating index annuity returns,
including but not limited to, the method where the return is usually capped
(e.g. at 8-14%) or where there is no cap, but the indexed is averaged. Also,
withdrawals prior to vesting could have an impact on returns.
Indexed annuities can be well suited for people who want to help protect
their original principal as the original amount is guaranteed by the issuing
annuity company and in most cases, a minimum interest rate is guaranteed as
well.
Advisory Services offered through
Envision Investment Advisors, LLC., An SEC Registered Investment Advisory Firm.
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Annuities 
