Annuities
Fixed Indexed Annuities: Benefits, Limits, and Surrender Periods
The short answer
A fixed indexed annuity (FIA) is an insurance contract that offers protection from market losses and growth linked to an index — in exchange for caps on that growth and limits on accessing your money for a period of time.
Potential benefits
- Protection of principal from market declines
- Growth potential tied to an index (subject to limits)
- Options for guaranteed lifetime income
Limits to understand honestly
- Caps and participation rates limit how much of the index gain you receive.
- Surrender periods restrict withdrawals beyond a set amount for a number of years.
- Guarantees depend on the claims-paying ability of the issuing insurance company.
An FIA can be a good fit for part of some families’ plans and unnecessary for others. It should solve a specific need — not simply be sold.
Related: Learn how income planning works on the Retirement Income Planning page.
Have questions about your own situation? Tracy is glad to talk it through with you — clearly and without pressure.
Educational only. Annuity features, caps, and surrender terms vary by state and company. Guarantees are subject to the claims-paying ability of the issuing insurance company. Non-guaranteed values and illustrations are not promises of future results. Not tax, legal, or investment advice.