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Fixed Indexed Annuities Ideal in Today’s Market

April 8, 2011 | Filed Under Finance, Investment, Retirement Savings | Comments Off

Between 2007 and early 2009, variable and traditional fixed annuities have been the leaders in the annuity market.  Since mid 2009, however, fixed indexed annuities have led the way.  An indexed annuity is a product that allows the owner to have the advantages of gains linked to the stock market without the risk of loss to principal.

Why the shift, what does fixed indexed annuities have over the traditional or variable annuity? According to Joseph Montminy, assistant vice-president and head of annuity research at the Windsor, Conn.-based insurance industry group LIMRA, is that, “Equity market volatility and the ability of Fixed Indexed Annuities to partially shield policyholders from that volatility, while also affording them a measure of upside participation, is a major selling point.”

Insurance companies are also working to simplify and fortify their Fixed Indexed Annuity products to attract more clients.  Products with shorter surrender periods, and optional guaranteed lifetime withdrawal benefits, similar to those available with variable annuities, make fixed indexed annuities highly competitive with their counterparts.

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