Indexed Annuity

An "Indexed Annuity," also known as a fixed indexed annuity or equity-indexed annuity, is a type of annuity contract that offers potential returns based on the performance of a specific market index, such as the S&P 500.

Unlike traditional fixed annuities that provide a guaranteed interest rate, indexed annuities allow for the possibility of higher returns linked to positive market performance. However, they also typically include a guaranteed minimum return, ensuring that the annuitant's principal is protected from market downturns.

For investors, indexed annuities present an attractive middle ground between fixed and variable annuities. They offer the potential for higher returns during bullish market conditions, thanks to their link to a market index.