FIA Annuity Structuring
FIA stands for Fixed Index Annuity. It is a type of annuity that offers a combination of features from both fixed and variable annuities. In a Fixed Index Annuity, the growth of the annuity value is linked to the performance of a specific stock market index, (S&P 500 or the Dow Jones Industrial Average). However, unlike variable annuities, the principal investment is not directly exposed to market risk. This means that even if the index performs poorly, the annuity value is protected from losses, and the individual will not lose their initial investment. This is referred to as a 0% floor, and typically guarantees a minimum rate of return, known as the “fixed” component which ensures that the annuity value will grow, regardless of the performance of the index.
Many FIAs also offer additional benefits, such as a guaranteed income stream for retirement, death benefits, and the ability to withdraw a certain percentage of the annuity value annually without incurring surrender charges and tax-deferred growth.
Many FIAs also offer additional benefits, such as a guaranteed income stream for retirement, death benefits, and the ability to withdraw a certain percentage of the annuity value annually without incurring surrender charges and tax-deferred growth.