What are fixed index annuities and how are they different from traditional annuities? Great question! Well, an indexed annuities performance is linked to stocks, such as the S&P 500. While traditional annuities have a guaranteed rate of return from the insurer or insurance company. Traditional annuities are great products if an individual wants to know exactly how much money they are going to get out of their investment over a certain number of years. An index annuity on the other hand is usually set up to where the rate of return is based on stock market performances. Here is where it gets really interesting. In a properly structured fixed index annuity, the insurance company will usually put a floor of 0%, doing this protects the insured from losing any money. What does this mean?

There are all sorts of ways to insure your life or possibly pay for long-term care. However, is insurance right for you? To know the answer, you must first know what you’re dealing with. 

Life insurance is a personal contract with an insurance company that promises to pay a benefit to your beneficiaries or estate as a result of your untimely passing. This promise of payment is in exchange for smaller monthly, quarterly, or annual payments. This personal contract is a unilateral contract, which means that the insurance company is the only party that is legally obligated to pay. While there are many types of life insurance, everyone should be familiar with the two most common types of life insurance, whole life insurance, and term insurance.