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Fixed index annuity caps explained in 30sSummaryIn this 0:24 Annuities Explained YouTube Short, Jeffrey Scott McLeod, LUTC, covers “Fixed index annuity caps explained in 30s.” Fixed index annuity caps are just one way to make interest within an FIA. One is a participation rate, a cap rate,. And then a margin spread or administrative fee of the index gain. Let's say the S&P goes up by 20 and your cap, say, is seven, then that's your limit, 7% cap Insurance education only—not securities advice. Key takeaways
From 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. Fees, surrender charges, and any market value adjustment can reduce what you receive. Read the contract for how charges work in your state. Source: NAIC Buyer’s Guide for Deferred Annuities (2022). The guide does not endorse any company or policy. For your state insurance department, see 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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