Annuities
Who’s Who in a Fixed Indexed Annuity
Who's Who in a Fixed Indexed Annuity?
A fixed indexed annuity (or FIA) is a contract between you and an insurance company. The details of the agreement are outlined in the specific contract: how long the money needs to stay in the annuity, the way the interest rate is calculated, etc. One of the major benefits of an annuity is the possibility of securing an income for life. Additionally, they can be set up to allow you to gain a reasonable rate of return** with guaranteed* protection of principal, regardless of the state of the stock market.
Does an FIA Come With a Death Benefit?
Certain annuity products, such as FIAs, offer a death benefit to your spouse or other beneficiaries. There are several options available to you when it comes to the death benefit. For example, you may decide to have the benefit paid as a lump sum. Or, you may set it up so that your spouse receives it in the form of regular payments. Whichever option you choose, be sure that you understand the specifics. If you want to learn more about how a fixed indexed annuity works, we’d be happy to answer your questions.
Who's Who in a Fixed Indexed Annuity?
Three, sometimes four, parties are involved in an FIA contract. These four roles are:
- The issuing insurance company is responsible for backing the claims of the annuity
- The contract owner purchases and contributes the money to the annuity
- The annuitant receives the payout from the annuity (typically, the contract owner and the annuitant are the same person, but they can be different in some cases)
- The beneficiaries receive a death benefit from the annuity after the annuitant passes away
