Annuities:  The Shocking Truths Revealed

Discover the Shocking Secrets About Annuities that Banks
and Insurance Companies Don't Want You to Know.

-- By Tony Bahu
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Equity Index Annuity

If you want to give your money a little potential to grow without making it vulnerable to stock market downslides, an equity index annuity might be a good choice. Under an equity index annuity, the insurer protects you from losses in case the markets perform badly. The tradeoff is that there is a limit to your earnings when there is an upswing in the markets.

Under an equity index annuity, the earnings on your capital are linked to equity indexes like the S&P 500, Dow Jones or Nasdaq. It gives you a minimum guaranteed return in the markets, in return for which there is a cap on how much you can earn. An equity index annuity gives your money more scope to grow than a fixed annuity does, but without the risk of a variable annuity where your returns depend entirely on the fate of investments you make.

Some agents might pitch an equity index annuity as the best thing ever, but you need to understand the concept thoroughly before you invest in one. There could still be scenarios where you could lose money. Do not purchase an equity index annuity without consulting an investment advisor. You especially need to find out how the potential insurer plans to let the returns roll in. Some unscrupulous companies have been known to offer unbelievably attractive returns and then lower the annuitant's potential after the first year without his/her knowledge. A good insurance company would not mislead you by offering such huge incentives.

Reading the fine print and comparing the products of various companies before buying an equity index annuity is crucial because it is a complex concept. Different companies use different indexing methods. There is also a participation rate, which determines how much of the increase in index would be used to calculate the interest. Some companies spell out a cap (upper limit) or floor (lower limit) on the returns. These are just some of the things that affect an equity index annuity. You must ensure you understand an equity index annuity's workings fully before putting your money into one.

If you have trouble understanding finance and are worried some smooth-talking annuity agent might take you for a ride, do visit . This website exposes the games many unscrupulous agents play and lays bare the means they use to deceive and mislead their clients, costing ordinary people like you and me thousands of dollars. Don't take a risk with your life savings. Let annuitymd help you.