Individual Rollover IRA’s

What is fixed index annuity?

Here is an easy way to understand an “Indexed” Annuity:

Consider attending a baseball event and you‘re in the stands watching the game. You have money in your hand and you decide to bet on the game. If you do so you’re “betting your money on the game on the field“ and you will either win the bet or lose the bet as the game progresses this can be compared to you betting on the stock, bond or mutual fund market and your money will either go up or down or you can lose everything. Note: these financial vehicles are known as “variable” dollars” and some financial institutions will “charge” the investor to guarantee that a certain percentage (%) cannot be lost but a loss is possible as well as a gain— and the risk remains yours.

Now consider you are betting on that same game but instead of betting on the game being played on the field you decide to take the money in your hand “but now you’re betting on thescoreboard“. Whether the scoreboard goes up or down you cannot lose your money because the scoreboard is simply showing the “score” and it does not matter whether the game is won or lost since it’s simply the numbers during each inning of the game that effect your money. These financial vehicles are known as “fixed/guaranteed dollars” and there are “no charges” to protect against any loss of your money and you cannot lose your principle as well as you may secure potential growth.

One of these contracts/policies are known as fixed indexed annuities