Fixed index annuity is nothing but one kind of insurance. Annuity means a fixed amount of money or allowance paid you yearly. Fixed index annuity is a special type of annuity where the interests are paid on the basis of one or more major stock index.
- Highly bifacial: If you study the index annuity
, you willfind that there are amazing benefits in this investment. Such as one very popular benefit is that it will increase your capital with a certain rate per year no matter what market does.
Disadvantages of Fixed Index Annuity
Fixed index annuity has some problems too. You must get a clear concept about them.
- Complexity: It is a complex type of investment. There is wide range of variety of annuity. These are so much complex that many time people fail to understand it clearly.
- Sometimes fail to full return: Sometimes they failed to give the entire return of the market index they are tied too. In fact different index annuities calculate the gain in different ways.
- Fees: There is another problem that it has surrender charge. Some annuities charge is as high as 20% and many people can’t stay here for a long time.
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