Long-form
Annuities Explained | Fixed Index Annuity Annual Point To PointSummaryIn this 1:35 Annuities Explained video, Jeffrey Scott McLeod, LUTC, covers “Annuities Explained.” On this page, you'll find a link that goes to a form you can complete and we'll send you the buyer's guide to fixed index annuities prepared by the National Association of. Insurance Commissioners and two or three fixed index annuity brochures along with income writers and quotes. This is how annual pointto-oint works within a fixed index annuity. The buyer guide goes into great detail. They just take the beginning date and the ending date annual point to point. If the index is up 20%, the insurance company will pay you a cap or a participation rate of that gain. That means if the index is up 20, your maximum interest is five. Or you may look for a participation rate of say 50% and if the index is up by 20, 50% of that is 10 Insurance education only—not securities advice. Key takeaways
ChaptersFrom the NAIC Buyer’s GuideIndex interest formulas may use features such as participation rates, cap rates, and spread/margin rates, so credited interest may reflect only part of an index change. If the index goes down over the period, zero interest is added for that feature and annuity value will not go down from that index change as long as you do not withdraw the money. Fixed indexed annuities are a type of fixed annuity that earn interest based on changes in a market index; the interest rate is guaranteed never to be less than zero, even if the market goes down. When you buy an indexed annuity, you are not investing directly in the market or the index. Common indexing methods described in NAIC materials include annual reset (ratcheting), high-water mark, and point-to-point. The indexing method is the approach used to measure the amount of change, if any, in the index. Sources: NAIC Buyer’s Guide for Deferred Annuities (2022); NAIC Buyer’s Guide for Fixed Deferred Annuities — Appendix for Equity-Indexed Annuities (2007 materials). The guides do not endorse any company or policy. State insurance departments: www.naic.org. Questions about fixed index annuities? Call or text 501-658-9882 · Book a time on the calendar Insurance-only disclaimer Jeffrey Scott McLeod, LUTC, is a licensed insurance producer. Content on this page is educational and discusses insurance products only—not securities, brokerage, or investment advisory services. Texas license 901162. Arkansas / National Producer Number 558629. Product availability, rates, and features vary by state and insurer. Read the NAIC Buyer’s Guide and the insurance contract before you buy. More videos |
Jeffrey Scott McLeod, LUTC — Licensed insurance producer. Texas license 901162. Arkansas / National Producer Number 558629. Insurance products only; not securities or investment advisory services.
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