What is an Indexed Annuity (IA)?
A contract issued by an insurance company that has a minimum guarantee where crediting of any excess interest is determined by the performance of an external index, such as the Standard and Poor’s 500® index. An Indexed Annuity is considered a moderate risk/moderate return annuity product. What is a Variable Annuity (VA)? A contract issued by an insurance company where crediting of any interest is determined by the performance of underlying investment choices that the annuity owner selects. A Variable Annuity is considered a high risk/high return annuity product. There are three basic questions that must be asked, when considering the purchase of an annuity: 1. What level of market risk am I willing to assume with the annuity? a. If more concerned about a high minimum guarantee, regardless of the lower level of interest accumulation, consider a fixed annuity. b. If willing to accept a lower minimum guarantee than a fixed annuity, but looking for potentially greater interest accumulatio
