Think About It
The Game of Risk or No Risk
There's no doubt that Index Annuities are here to stay and have become a dominating force within the annuity marketplace. You need to understand both fixed and variable products in order to really appreciate the full value created by high-quality index annuities. Simply put, Index Annuities are a steadfast "fixed" product due to their underlying guarantees. Additionally, they also allow a consumer to enjoy the potential for gains calculated based upon market performance. In many ways, they essentially bridge-the-gap (or fill the void) between fixed annuities and variable annuities. Here are two analogies to help you to understand the value of utilizing Index Annuities as a part of your overall asset portfolio
Analogy #1
Consider the card game of Blackjack. Most are familiar with it, but simply put if you play a $10 hand and you win, you would receive your $10 back plus an additional $10 from the dealer. On the other hand, if you lost the hand, you would lose your $10 to the dealer. But imagine if there were a new type of "index" Blackjack in which if you played your $10 and won, you would only receive $6-$7 in winnings. But if you lost, you would be allowed to keep your original $10 and play again. Which Blackjack game would you be more comfortable playing?
Analogy #2
Most people know that Babe Ruth was the home run king, but what was he also the king of?" (hint: he was also the strikeout king). You see, Babe Ruth's career was kind of an all-or-nothing approach much like Blackjack. But how do you think a baseball coach would respond to the following scenario...at if a coach could elect to play baseball one of two ways? First, they could play the traditional way where all of the players at bat could hit a home-run, triple, double, single, walk or strikeout. Or they could opt to have their team play under a new set of rules where the home run is permanently eliminated, but so is the strikeout. Meaning they could be guaranteed of getting singles, doubles, or triples... But never a home run or strikeout. Which set of rules would you choose to win the game? Talk to an Equity Index Annuity Specialist to better understand all the benefits of this type annuity.