When is the Right Time to Get a Fixed Index Annuity?

Fixed Index Annuities (FIA) are growing in popularity.

Positioned to take over all other annuity products in sales, FIA products are offering the best of both worlds for investors.

Protect Principal, Spark Growth

You can both protect principal and spark significant growth with an FIA product.

One of the only downsides with FIA products is the incredible variety of crediting options available (how you make a return). With different formulas and competing companies offering the investment opportunity, it can be confusing to know when and where to buy.

Financial advisors recommend the product for growth and protection. But financial advisors also warn to be wary of bad products with confusing returns.

Plus, there are so many varieties of annuities available, it can be difficult to know which one is right for you. A Single Premium Immediate Annuity (SPIA) offers distinct benefits that are different from a Fixed Index Annuity, for example.

It’s important to understand the financial product you are investing in and decide if it’s right for you.

If you already own annuities, especially if it’s a variable annuity, you should consider a move to a Fixed Index product. The market saw a huge move away from variable annuities into index annuities. And if you are new to annuities you may be wondering if they are right for you.

There’s no time to waste. And we can help you find the best annuity.

You could be seeing your principal rise with every move of a major market index. Let’s make sure you know when to buy.

We’ve put together some expert tips about FIA products (Fixed Index Annuities). We’ve got you covered.

Ready to see what an FIA product can do for you? Here we go:

What is a Fixed Index Annuity?

Before we decide when you should purchase an FIA, let’s make sure you know exactly what the products are.

A Fixed Index Annuity credits a minimum guaranteed rate of interest over a fixed number of years. Plus, additional interest may be credited based on the percentage change in the value of a broad market index.

This additional interest is calculated using a formula. The result determines how much of that percentage change applies to the value of the individual’s FIA.

Example: An FIA with a participation rate of 50% of the change in the value of the S&P 500 index. If the index returns 10% in a policy year, 5% would be credited to the account.

An FIA limits upside which limits risk as well. They are a great combination of elements for a financial growth plan.

In addition, many FIAs now offer Guaranteed Lifetime Withdrawal Benefits. This makes a Fixed Index Annuity both an accumulation and income solution.

The first FIA products hit the market in 1995. But adjustments to formulas and refinement of the product has made it more popular in recent years.

Fixed Index Annuity products have grown significantly.

Sales increased 14% to $38.7 billion in 2013
Sales increased 24% to $48 billion in 2014.
This represents 21% of all annuity sales.
Experts expect growth rates of FIA products to continue.

This growth is due to the benefits an FIA offers over other similar annuity products.

The Distinct Phases of an Annuity

Understanding the two distinct phases of an annuity will help you create a strategy that works for you. Seniors are often swindled by the unrealistic promises of an annuity product.

In some cases, you will need to make a decision between a lump sum payment into your annuity (single premium) or a gradual investment period (flexible premium).

What About The Risk?

If you are wondering when is the right time to jump into the perfect Fixed Index Annuity for you, it is now.

Experts point out that the upside of a Fixed Index Annuity is that it “gives you exposure to the market but at no risk of loss to your principal.”

A Fixed Index Annuity is a fixed annuity with a variable rate of return. This return is based on an index.

You don’t have to worry about the loss of your principal with an FIA.

While you may consider other products for their growth potential, as a retirement option, the FIA gives you both protection and growth. When talking asset allocation this is the conservative money, money that you would put into bonds or bond funds.

As long as you understand the formula, and have expert advice, you don’t need to hesitate.

Understand The Formula

Different Fixed Index Annuities offer different opportunities for investors. Some critics warn that the products can be difficult for buyers to understand.

The Securities Exchange Commission (SEC) warns that all “indexed annuities are complicated products that may contain several features that can affect your return.”

They suggest that “you understand how an indexed annuity computes its index-linked interest rate before you buy.”

The SEC also points out that “an insurance company may credit you with a lower return than the actual index’s gain.”

There are incredible upsides to FIA products. But you need to know the exact benefits and risks of the product you are thinking of investing in.

The right time to buy a Fixed Income Annuity is only after you understand the product and if it’s right for you.

An expert can help.

Get Expert Help

Everyone’s journey is different. And with market fluctuations and a wide range of different products on the market, it can be difficult to know when the time is right.

Your personal financial situation and financial goals can affect your decision making as much as any other information. You need to know when the time is right for you.

A financial advisor can help.

You don’t need to try and navigate the complex world of annuities on your own. Tennessee Annuity Rates can provide you with information that is essential to your financial journey.

For families looking to protect their assets. Consequently it’s best to get help from a trusted advisor. Don’t wait.

Did you know Tennessee Annuity Rates offers a free consultation to help assess your situation and find the best strategy for you and your loved ones?