Fixed Index Annuities: What Are They? How Are They Different?
September 9, 2020 by Wade Pfau
In this discussion of fixed index annuities, which use to be called equity indexed annuities, I am mostly making an implicit assumption that the annuity is competitively priced. Internal costs reflect was is needed to support the guarantees provided by the insurance company and to keep the company reasonably profitable. But costs are not excessive such that the value to the consumer is eliminated. As well, I assume value is created because the annuity has a clear role to play in the financial plan and is not being sold by an unscrupulous financial advisor only to generate a commission.