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Yr 1 | Yr 2+
|Sentinel Security Life||Accumulation Protector Plus w/ Rate Rider||B++||6.00||0% / 5%||10 yrs|
|SILAC||Denali 10||B+||5.50||0% / 5%||10 yrs|
|SILAC||Denali 10 (DE, ID, MA, MO, NV, SC, TX)||B+||5.25||0% / 5%||10 yrs|
|American National (ANICO)||Strategy Indexed Annuity PLUS 10||A||5.00||10% / 10%||10 yrs|
|Fidelity & Guaranty Life||Prosperity Elite 10 Enhancement||A-||5.00||0% / 10%||10 yrs|
|Fidelity & Guaranty Life||Prosperity Elite 10 Protection||A-||5.00||0% / 10%||10 yrs|
|Nassau Life and Annuity||Nassau Growth Annuity 10 Group A||B+||5.00||5% / 5%||10 yrs|
|Sentinel Security Life||Accumulation Protector Plus||B++||4.80||0% / 5%||10 yrs|
|SILAC||Teton 10||B+||4.75||0% / 5%||10 yrs|
|American General (AIG)||Power 10 Protector High Band||A||4.50||0% / 10%||10 yrs|
At each annual contract anniversary, the performance of the market index you’ve selected is measured. If the index performs (increases in value) you get a percentage of the growth. The amount of the index performance your FIA is credited to is determined by the crediting method you’ve selected. There are a couple of different index annuity crediting methods but Annual Point to Point is by far the most common so for time’s sake that’s the one we’ll focus on here.
Calculating index performance using the annual point-to-point method:
Fixed Index Annuity Example:
Assuming a 5.00% cap, 2.00% spread and a 75% participation rate let us calculate the amount of annual interest a fixed index annuity would be credited using the 7% index performance in our example above.
Cap = 5% Interest credited (100% of index performance up to the cap)
Spread = 5% Interest credited (index performance minus the spread)
Participation Rate = 5.25% Interest Credited (index performance)
|Annuity Company||AM Best Rating||Stock Market Index Page|
|AIG||A||S&P 500 (Ticker: SPX)|
|AIG||A||AQR DynamiQ Allocation Index|
|AIG||A||Merrill Lynch Strategic Balanced Index (MLSB)|
|AIG||A||PIMCO Global Optima Index PIMGOPT|
|AIG||A||Russell 2000 Small Cap Market Index .RUT|
|AIG||A||MSCI EAFE - Non U.S. and Canada Index EAFE|
|Allianz||A+||S&P 500 (Ticker: SPX)|
|Allianz||A+||Nasdaq 100 Index|
|Allianz||A+||Blackrock iBLD Claria Index (IBLDCLRA)|
|Allianz||A+||PIMCO Tactical Balanced Index|
|Allianz||A+||Bloomberg US Dynamic Balance Index II|
|American Equity||A-||S&P 500 Daily Risk Control 2 8% Index|
|American Equity||A-||Dow Jones Industrial Average (DJIA)|
|American Equity||A-||S&P 500 Dividends Aristocrats Index|
|American Equity||A-||S&P 500 (Ticker: SPX)|
|Athene||A||AiPex Performance Index|
|Athene||A||S&P 500 Daily Risk Control 2 8% Index|
|Athene||A||NASDAQ Fast Convergence Index BOFANFCC|
|Athene||A||S&P 500 Daily Risk Control 5% Index|
|EquiTrust||B++||Barclays Focus50 Index (BXIIF50E)|
|Fidelity & Guaranty||A-||S&P 500 (Ticker: SPX)|
|Fidelity & Guaranty||A-||iShares Real Estate ETF|
|Fidelity & Guaranty||A-||Balanced Asset 10 Index|
|Fidelity & Guaranty||A-||iShares Core S&P 500 ETF|
|Fidelity & Guaranty||A-||Balanced Asset 10 Index. Ticker: CIBQB10E|
|Fidelity & Guaranty||A-||Barclays Trailblazer Sector 5 Index (ticker BXIITBZ5)|
|Global Atlantic||A||PIMCO Balanced Index PIMBAL|
|Global Atlantic||A||MSCI EAFE Non U.S. and Canada Stock Index EAFE|
|Global Atlantic||A||Russell 2000 Small Cap Index .RUT|
|Global Atlantic||A||Blackrock Diversa Volatility Controlled Index ^IBLDV7E|
|Global Atlantic||A||Franklin U.S. Equity Index FTUSLX|
|Great American||A||S&P 500 Daily Risk Control 10% Index (Ticker : SPXT10UT)|
|Great American||A||IShares U.S. Real Estate ETF 1YR|
|Great American||A||S&P 500 U.S. Retiree Spending Index|
|Lincoln Financial||A+||Fidelity AIM Dividend Index Ticker: FIDAIMDN|
|Lincoln Financial||A+||S&P 500 Daily Risk Control Index 5%|
|Nationwide||A+||S&P 500 Daily Risk Control 5% Index|
|Nationwide||A+||S&P 500 (Ticker: SPX)|
|Nationwide||A+||AB Growth and Value Balanced Index (Ticker: ABGAVL)|
|North American||A+||S&P 500 Low Volatility Daily Risk Control 5% (Ticker: SPLV5UT)|
|North American||A+||S&P MARC 5% ER (Ticker: SPMARC5P)|
|North American||A+||Fidelity Multifactor Yield Index 5% ER (Ticker: FIDMFYDN)|
|North American||A+||S&P 500 (Ticker: SPX)|
|North American||A+||NASDAQ 100 Index|
|Oxford Life||A-||S&P 500 Index|
|Oxford Life||A-||2 Year Citi Flexible Allocation Index CIISFM6E|
|Principal||A+||S&P 500 Index SPX|
|Reliance Standard||A+||S&P 500 Index|
|The Standard||A+||S&P 500 Index SPX|
Available Indexes: The stock market indexes available in the index annuity. We have a list of available stock market indexes available at each insurance carrier for simplicity.
Duration: Typically the longer contract you purchase the higher your guaranteed interest rate will be. But that is not the case, especially given the current inverted yield curve.
Liquidity: Most all fixed annuities have some type of annual free withdrawals, but the amount available varies by product. You’ll see most of the fixed annuities at our marketplace provide interest-only withdrawals annually. Others allow for 10% Free Withdrawals (10% of the previous years’ account value) annually.
Insurance Company’s Financial Rating: It is very important to consider an insurance company’s financial rating because it is an indicator of its ability to fulfill financial commitments to its policyholders. Usually, a lesser-rated insurance company will offer higher fixed annuity rates, but that is not always the case.
Earnings within an annuity contract are tax-deferred. This means you do not pay income taxes on the earnings until you withdraw gains from your account. Therefore, there are no annual 1099 forms to file or earned-interest entries to make on your 1040. Tax deferral also means that annuity earnings do not offset Social Security benefits as with earnings from bonds, CDs, and other investments.
Fixed index annuities may credit higher interest rates than bank CDs or fixed interest rate deferred annuities.
Investors who have maximized contributions to their qualified retirement plans (i.e. 401k, IRAs, and pensions) are permitted to contribute without limit to a tax-deferred annuity.
When interest rates trend upward, annuity accounts are insulated from loss of principal; increasing interest rates often negatively impact government bonds and bond mutual funds. Unlike bonds that lose principal value during periods of rising interest rates, the account value of a fixed index annuity is guaranteed.
Annuities can offer valuable tax savings for employees under the age of 59½ who receive large, lump-sum distributions from their 401(k) profit-sharing plans as part of an early retirement or severance package. Such amounts can be “rolled over” into an annuity policy without having to recognize taxable income.
Retirees over the age of 70½ are required to begin taking withdrawals from their IRA or Pension plans, known as Required Minimum Distributions (RMDs). The IRS penalty for not doing so is a substantial 50% of any amount that falls short of the Required Minimum Distribution.
By “annuitizing” your IRA or fixed index annuity, you can exchange its value for an “immediate annuity” income stream in any of several forms (see earlier discussion on “Immediate Annuities”).
Fixed annuities are really meant to be used for retirement savings. The IRS issues a 10% penalty on gains withdrawn from a fixed annuity for account holders under age 59½.
FIAs are highly customizable with a lot of moving parts which can sometimes scare people away or make it hard to select the index annuity that best meets your objectives.
Get help when you want it.
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