What are Fixed and Indexed Annuities?


An annuity is a contract between the policyholder, annuitant (may be same as policy holder), and the insurance company, between usually 3-14 years in duration. The policyholder gives his or her money to the insurance company, and in return, the insurance company guarantees* the policyholder a specific set of benefits. In the case of Fixed Annuities, the insurance company promises to pay policyholder a fixed rate of interest for a specified period of time. For Indexed Annuities, the insurance company promises to pay the policyholder a rate of return that is dependent on the performance of a market index. For example, many Indexed Annuities pay interest that is linked to the performance of the S&P 500. There are many ways these type of strategies pay interest, but in a nutshell, if the index performance is positive, policyholders receive the same return as the index(usually subject to a cap, limit, and/or participation rate). On the other hand, if the index performance is flat or negative, the policyholder does not receive an interest payment for that interest crediting period( which is usually one year, but can be longer). Keep in mind that policyholder funds are NOT invested in the market index and therefore, if the market index is negative, the policyholder’s annuity contract will not decrease in value.



How Immediate

Annuities Can

Enhance Your


  • One steady payment for life. "It takes away the anxiety that you may live longer than your money," says Steven Weisbart, an economist with the Insurance Information Institute of New York City, a nonprofit association financed by the insurance industry.

  • They're simple. The company that provides the annuity handles the investment responsibilities.

  • They're low-risk. That's assuming the provider is financially secure. The funds are guaranteed by the assets of the insurer and aren't subject to the vagaries of financial markets.

  • They're tax-efficient. If you use tax-deferred vehicles to fund them, you only pay taxes on the checks you receive rather than on the entire lump sum.





With Other

Financial Products 

Surrender of the contract may be subject to surrender charges or market value adjustment. Market Value Adjustment may not apply in all states. Withdrawals before age 59 1/2 may result in a 10% IRS penalty tax. Withdrawals do not participate in index growth. In the event of a full surrender, charges will apply to any penalty-free amounts taken during the same contract year.


Benefits: Bull Performance

with Bear Protection


For illustration purposes only, and not a representation of future results.





Safety &

Tax Deferral

While annuities are not suitable for everyone, they can be a valuable financial planning tool for those seeking to safely grow their assets. Many purchase annuities because they are tax-deferred. This means that the policyholder pays no income taxes on the contract’s earnings until such earnings are withdrawn from the contract. In addition, there are no sales commissions or management fees paid out of policyholder funds so 100% of policy investments go to work on day one of the policy. Some carriers even allow policyholders to withdraw a portion of their annuity funds (usually 10-15% or earned interest) before maturity without incurring surrender or market value adjustment penalties.

Taxable VS Tax Deferred

Assuming a 10/1/2001 start date and 10/1 anniversary dates.

Historical performance of the S&P 500®


Index should not be considered a representation of current or future performance of the Index or of your Annuity. Each example shown above assumes a $100,000 initial premium

with no withdrawals. The Cap is for hypothetical purposes only. Please contact the Company for current Caps.