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What is an annuity NAIC guide IIISummaryIn this 1:58 Annuities Explained YouTube Short, Jeffrey Scott McLeod, LUTC, covers “What is an annuity NAIC guide III.” An indexed annuity is a fixed annuity either immediate or deferred that earns interest or provides benefits that are linked to an external reference. When you buy an index annuity, you own an insurance contract. An indexed annuity is different from other fixed annuities. First part they talk about here in the buyer's guide is indexing method, annual reset 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. Index 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. 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. 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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