Do Fixed Index Annuities have fees?
Fixed Index Annuities do not have any fees in general; however, there are optional income riders, long-term care riders, and death benefit riders that can be added to an index annuity for a fee.
Are fixed index annuities a good investment?
What the disadvantages of a fixed index annuity?
- Gains are limited by a crediting method or “limiting factor”
- Fixed index annuity contracts can be complex and difficult to compare
- Indexed annuity contracts vary greatly from insurance company to company
- They are highly customizable and typically require an experts assistance
- Surrender penalties for withdrawals above the annual free withdrawal provision
- Potential 10% IRS tax penalty for withdrawals prior to age 59 ½
- Interest crediting factors (cap, participation rate, and spreads) can change on the contract anniversary date.