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The Risk with Fixed Indexed Annuities


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In uncertain times, investors often look for safety of principal. One popular place to look for financial safety is fixed indexed annuities, but they come with risks that consumers should be aware of.
A fixed indexed annuity’s performance is based on the growth of an external index. If the index is positive, then you are credited interest based on your participation in the index. However, when the index is negative you do not lose money. Your principal is locked in annually and does not directly participate in the stock index.
While you are guaranteed not to lose money due to stock market or index losses in a fixed indexed annuity, you aren’t guaranteed to make money. But that’s not the only risk. ....

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