You've no doubt heard about Fixed Indexed Annuities. These are excellent financial vehicles for seniors because of their safety.

A fixed-indexed annuity is a fixed annuity, either immediate or deferred, that earns interest or provides benefits that are linked to an external equity reference or an equity index. The value of the index might be tied to a stock or other equity index. One of the most commonly used indices is Standard & Poor's 500 Composite Stock Price Index (the S&P 500), which is an equity index. The value of any index varies from day to day and is not predictable. When you buy a fixed-indexed annuity you own an insurance contract. You are not buying shares of any stock of index.

Features and Benefits of the EIA:

  • Safety of principal!
  • Guaranteed protection from market loss!
  • Gains are tax-deferred!
  • Access to funds through free withdrawals (policy specific)!
  • Death benefits by-pass probate!

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WHAT IS AN ANNUITY?
An annuity is a contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement. The holder is taxed only when they start taking distributions or if they withdraw funds from the account. All annuities are tax-deferred, meaning that the earnings from investments in these accounts grow tax-deferred until withdrawal. Annuity earnings are also tax-deferred so they cannot be withdrawn without penalty until a certain specified age. Fixed annuities guarantee a certain payment amount, while variable annuities do not. An annuity has a death benefit equivalent to the higher of the current value of the annuity or the amount the buyer has paid into it. If the owner dies during the accumulation phase, his or her heirs will receive the accumulated amount in the annuity.


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