Equity-Indexed Annuities

by Cara Scatizzi

Equity Indexed Annuities Splash image

Sales of equity-indexed annuities topped $30 billion last year, according to Investment News. These investment products offer rates of returns based on the performance of an index.

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Cara Scatizzi is a former associate financial analyst at AAII.
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How Annuities Work

An annuity is a contract purchased from a life insurance company that provides a stream of payments or income for a set length of time.

There are two main types of annuities. Deferred annuities allow investors to put away money on a tax-deferred basis so the entire investment can grow tax-free until withdrawals are taken in the future.

An immediate annuity has no accumulation period. The investor pays the insurance company a lump sum and receives a stream of payments immediately (within 12 months).

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Cara Scatizzi is a former associate financial analyst at AAII.


Discussion

1/31/11

There have been general articles on annuities. When I do a search, I come up with an article on Equity annuities. Are there any other articles? I am looking for a a general explanation of annuities.

aes@schillingsupply.com

posted over 2 years ago by Allan Schilling from Florida

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