Equity Index Annuity is one of the major kinds to check out. You can benefit a lot from that when you’re properly informed. Actually, equity index annuity is simply a combination of fixed and variable annuities. It’s meant to give you the best from variable and fixed annuities. The equity index annuity usually comes with guaranteed return that normally makes it profitable when the investment is doing very fine. In most cases, the return is determined by the actual performance of the benchmark index.
There are advantages and disadvantages that come with Equity index annuity. You need to be properly informed about them as you explore what is annuity. When it comes to the advantages, you’ll discover that equity index annuity will help you to participate in the upside position when the stock market is doing well. You’ll simply enjoy enough gain if the market is rising exponentially. You also have the chance to guard against losses when the market begins to fall. You have the benefit of receiving higher returns through equity index annuity than when you go for standard fixed annuity. There are always fewer risks to tackle in such investment.
When it comes to the disadvantages, you still need to know the truth. The fact is that equity index annuity is usually very technical and complex. Its complex nature requires enough time for someone to comprehend. If you’re not an expert in the financial market, you may find it very difficult to know what’s going on with the investment. The technicalities involved in equity index annuity are too much. You’ll always need to get them interpreted before you’ll know the next step to take.
The complex nature of this kind of annuity always scares investors away. You might decide to go for other kinds of annuities you can easily understand. Sometimes, equity index annuity is found not to be matching the entire return of the market index attached to it. The gains are usually calculated in a variety of ways by the experts involved. This also makes everything more complex. If you’re not well informed, you might even be confused about the entire process.
Again, there are some fees involved in equity index annuity. You’ll get to pay surrender charges, administrative fees and some other hidden charges. However, this depends on the insurance company you’re dealing with.
There’s always the need to know if equity index annuity is good for you or not. This is what you should concentrate on when looking at what is annuity. You must begin by making proper inquiries before you take any other step. Find out what your insurer is offering before you sign any contract. If for any reason you’re confused, you don’t need to act further. A good financial expert can help you make the right choice. All you need is to make the proper contact.