Long-form
Indexed Annuity Performance - Annual Reset 800-286-1812SummaryIn this 1:04 Annuities Explained video, Jeffrey Scott McLeod, LUTC, covers “Indexed Annuity Performance - Annual Reset.” This is how annual reset Works in a fixed index annuity let's say. This is Year 2007 and the market goes down you make zero in your annuity it's fixed it can't go down then the market goes down in 2008 you make zero in. Your fixed index annuity then you participate when the index goes up. For example from 2009 to 2010. And then when the market goes back down you make zero but those gains are locked in. So you're resetting every single year to strange feeling but you almost feel like you want the market to crash with a fixed index annuity Insurance education only—not securities advice. Key takeaways
From the NAIC Buyer’s GuideFixed 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. Under an annual reset (ratchet) method, index-linked interest is determined each year by comparing the index value at the start of the year with the value at the end of the year, subject to the contract’s formula. Interest credited for a year is locked in; the next year’s starting index point resets. 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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