When you add a guaranteed income rider to your fixed index annuity, you will be paid from your annuity every year. This is especially beneficial for seniors looking for a solution to supplement their Social Security or other retirement plans. Choosing an FIA can ensure you receive income for the rest of your life after retirement.
Low Maintenance Fees
When investing your money, you want to be certain that your investments will not be subject to a variety of fees and charges. Another benefit of choosing a fixed index annuity over other types of investments is that there are little expenses required for this type of annuity.
Generally, the only fee you will need to pay for an FIA is a surrender charge, which restricts how many withdrawals you can make from your annuity in its first year. You may also pay a small fee for any riders added to your annuity. Investing in a fixed index annuity is a great choice if you’re looking to avoid expensive maintenance fees.
Perhaps the best reason to choose a fixed index annuity is that your principal will be protected. When you purchase an FIA, the insurance company will use that money to purchase both treasury and high-grade corporate bonds to create a revenue stream. The revenue stream will then be used to invest in market. Your principal, however, will never be invested in the market and is only used to create a revenue stream.