How to buy an indexed annuity policy

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Indexed annuity policies can be a very valuable tool during economic downturns. Unlike the overall markets, these accounts do not lose value when the stock market decreases in value. However, there are many subtle, and not so subtle, differences in these accounts. One indexed annuity may provide substantial gains over another during the same market cycle.

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Instructions

Difficulty: Moderately Easy

Things You’ll Need:

A computer, patience and a little free time.

Step1

If you are interested in investing in an annuity - research is the first step. You need to learn the lingo first. Online research can be best. You need to learn about caps, participation rates, and spreads. You would want to become familiar with monthly and daily averaging, point to point, and high water mark accounts.

Step2

After leaning the terms, it is important to understand how the account credits interest. Some annuities will return more interest gains to the policy holder than others. Spreads will determine the rate passed onto you.

Step3

Once you have learned the terms and you understand how interest is credited to the account, then you have to shop around. There are many internet sites that advertise their current rates, yields, caps, and spreads. It is advisable to talk with a couple of agents or annuity marketers. You will only get the most bang for you buck by purchasing an account that passes the most interest onto you.