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LogoutAn indexed annuity is a type of annuity that pays interest depending on the performance of a market index, such as the S&P 500. Set annuities pay a fixed rate of interest, whereas variable annuities base their interest rate on a portfolio of securities selected by the annuity owner. Indexed annuities are also known as equity-indexed or fixed annuities.
An annuity that starts the income stream within the month or year of the premium deposit is called a single premium immediate annuity. The insurance company guarantees the income for the life of the annuitant. There are variations of this product that include inflation riders, return of unused premium, and joint income among others.
An Index Annuity is a tax favoured accumulation product issued by an insurance company. These appeal to retirees and pre-retirees who want to conservatively participate in potential market appreciation without fuss and with downside principal protection.