They usually dont have any fees (annual or funds) attached to them like VAs do. And they dont have the downside risk since they are not actual funds. Granted they dont have the diversity that a VA with 15 different funds has, but for a basic need for someone who is afraid of the market to begin with, it sound pretty good. Your thoughts?
2006-12-16 02:18:45 · 3 answers · asked by ricks 5 in Business & Finance ➔ Investing
index annuities are pushed because they have the highest commission for brokers. i have seen some as high as 15%. Usually it manifests itself in the participation rate. I would look at PPN's (principal protected notes) or ppcd (principal protected CD) They are a combination of zero coupon cd or bond and an option tied to a basket of securities. usually the options can be linked to anything from dow, s&p, Nik, currency to just about anything you can think of. The fees are similar in that they can be seen by a lower participation rate but they are far less than what you will see on an index annuity. They are probably more efficient in an ira because the zero coupon will have the phantom interest year over year. They are used quite a bit more in europe but they are starting to get some exposure here. And if you ever feel like getting an index annuity, gather the info and call a third party annuity company. Let them point out fees you might be missing.
2006-12-16 02:55:12 · answer #1 · answered by Jman 1 · 1⤊ 0⤋
Indexed annuities have more potential growth than fixed annuities but less risk than variable annuities. Indexed annuities will be good for you because they offer a guaranteed minimum rate and also allow your money to grow based from the market index that you have chosen.
2015-03-04 12:52:26 · answer #2 · answered by Anne 1 · 0⤊ 0⤋
Many of these equity indexed annuities have high commissions paid to your broker and other people. These fees are often hidden. The terms of these annuities are often so complex it is difficult to figure out if you are getting a good deal or not. I am highly suspicious of them. See these links for more information. (The last link asks for your e-mail address. While it is a good article, the website will spam you with financial e-mails. Be forewarned.)
2006-12-16 03:29:49 · answer #3 · answered by Anonymous · 0⤊ 0⤋