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What Are Indexed Annuities
By Jeff Mcleod

According to The National Association of Insurance Commissioners Buyer's Guide, "An indexed annuity is a fixed annuity, either immediate or deferred, that earns interest or provides benefits that are linked to an external equity reference or an equity index.

When you buy an indexed annuity you own an insurance contract. You are not buying shares of any stock or index.

An indexed annuity is different from other fixed annuities because of the way it credits interest to your annuity's value. Indexed annuities credit interest using a formula based on changes in the index to which the annuity is linked. The formula decides how the additional interest, if any, is calculated and credited. How much add...
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