Indexed Annuities

Until the mid-1990s investors in annuities didn't have the option of choosing an indexed annuity. It quickly gained in popularity. These annuities are designed to mirror the performance of a well-known index like the popular S&P 500 or the Russell 1000.

Participation Rate
By tracking an index, investors participate in market changes and should be able to track ups and down in the annuity's value very easily. More importantly, however, is how closely the indexed annuity will reflect an index's actual performance. This is determined by the participation rate, and is calculated by a percentage.

If, for example, the participation rate is 70 percent and the index increases by eight percent, the indexed annuity's accumulated value increases by 5.6 percent. While this looks like a bad thing at first, remember that the same will hold true on downswings. Happily, insurers know that nobody likes losing money and will also often specify minimum rates below which an indexed annuity will not fall.

Like fixed annuities, there will be specifics tied to each particular indexed annuity. That's why we're here to help. At AnnuitySearch.com, we are an independent company looking for the best annuities for you. Whether it is a fixed or deferred annuity, let us help you make the best investment choice for your future.