What is a Fixed Indexed Annuity?
A Fixed Indexed Annuity is a tax-deferred, stable, financial option designed to grow your client’s premium and protect it if the market drops. This product is typically accompanied by multiple crediting strategies that your client can choose to participate in. These crediting strategies include at least one indexed account and may also include a Fixed Rate account, as seen with the Accumulation Protector PlusSM Annuity. When your client selects an indexing strategy, they are credited interest at the end of the crediting period in the event the index value grows.
A Fixed Indexed Annuity offers access to more interest growth potential as the market performs positively. In addition to growth potential, a Fixed Indexed Annuity offers protection of principal in several different ways. Your client does not lose money, including interest earned during previous crediting periods, if the index value drops because their money is allocated to the annuity itself rather than directly to the index (or indices). Additionally, the indexed accounts typically offer a minimum guaranteed interest rate of at least 0%.
Benefits of Having APP!
Some annuities do not offer free early withdrawals, but in the second contract year, the Accumulation Protector PlusSM Annuity allows the policyholder to withdraw up to 5% of their Account Value or Required Minimum Distribution, whichever greater.
Terminal Illness and Nursing Home Waiver
If the policyholder is diagnosed with a terminal illness or needs to move into a nursing home, they can make a full surrender or partial withdrawal with no Market Value Adjustment, Surrender Charge, or loss of any applicable non-vested premium bonus under certain conditions.
Rate Enhancement Rider
The policyholder can choose to add a Rate Enhancement Rider that increases the amount available for free withdrawal up to 10% and increases the fixed, cap, and par rates in the buckets. A 110% ROP guarantee will be offered if the policy owner purchases the Rate Enhancement Rider and persists to year 10.