Annuities
Annuities are contracts between investors and an insurance company in which the company promises to make periodic payments to the investor, starting immediately ("fixed") or at some future time ("deferred"). Annuities generally come in three types:
- Fixed—which means that the earnings and payout are guaranteed by the insurance company.
- Variable—which means that the amount that will accumulate and be paid will vary with the stock, bond, and money market funds that you chose as investment options.
- Equity-indexed annuities (EIAs)—which have characteristics of both fixed and variable annuities. Their return varies more than a fixed annuity, but not as much as a variable annuity
If the issuer of a fixed, variable, or equity-indexed annuity goes out of business, you risk losing your investment. Variable and equity-indexed annuities involve additional risks, which you can learn about by clicking the links below.
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Variable Annuities
In addition to exposing investors to market risk, variable annuities impose a variety of fees, not least of which are surrender charges and charges for special features such as a stepped-up death benefit or a guaranteed minimum income benefit.
Learn more.
Equity-Indexed Annuities (EIAs)
EIAs are complex investments that can be difficult to compare. Before considering an EIA investment, make sure you fully understand all of its features and be prepared to ask your insurance agent or investment professional lots of questions.
Learn more.
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