There are two basic types of annuity contracts – Fixed and Variable. Both include a variety of contribution and payout options. This blog will focus on a particular type of fixed annuity.
The equity-indexed annuity is a variation of the fixed annuity. With this type of annuity, your account accumulates at a minimum guaranteed rate of return. Your account also may earn additional interest based on the performance of an equity index. Generally, the indices used are widely reported common stock indices, the most prevalent being the Standard & Poor’s 500 Composite Stock Price Index.