Before figuring out where to go for an indexed annuity, it’s really important that you have a base understanding as to what an indexed annuity is and how it works.
The indexed annuity offers you an opportunity to participate in a portion of the markets upside growth, without the risk of losing any premium in the instance of a market decline. The fact that you are not guaranteed set set rates of return (as you would be with a fixed annuity) offers you potential for higher growth. It should be noted that indexed annuities will always have a minimum return of premium (i.e. worst case scenario) and will also carry a "cap" (i.e. best case scenario).
There are many places to find annuity information. All Things Annuity offers a free Annuity Buyer's Guide to cover the basics of indexed annuities, or you can visit our in depth indexed annuity section here. After gaining a basic understanding of the inner workings of indexed annuities, speak with your advisor or contact All Things Annuity for a more detailed discussion.
You will want to work with an agent or advisor who is completely independent. Independent advisors have no allegiance to a specific insurance carrier, and can typically offer a much wider array of available products. Agents who work for a specific company do not have access to all different types of products, and they could potentially try to force your investment into a box that it does not fit into.
When the broker lists the carriers that he/she works with, ask what the carrier’s ratings are. If the broker has a lot of companies that have "B" or "B+" ratings, that's not a great sign. This means that the strength and stability of the company has been in question. Carriers that are "A" and "A+" rated are companies that have great integrity and financial stability. These are the companies you want to be working with.
Before purchasing an indexed annuity, make sure you fully understand how that product can change over time. Most indexed annuities have features that can change after the first year, so you'll want to know what exactly can change about the product. An example would be a "cap" (maximum rate of return in a given year) that can change after the first year.
20 years ago, buying an annuity was done almost exclusively through the office of your local insurance agent. Now, however, you are able to purchase an annuity without ever leaving home with online applications. You will still need to work with an agent or planner, though doing so over the phone or through online video conferences is much more common.
If you are interested in learning more or would like to discuss the possible purchase of an annuity, call All Things Annuity at 1-800-501-1984 and our annuity specialist will be happy to help.
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