You might be wondering...

 “Are fixed index annuities a good purchase?” To answer this, let’s start with what a fixed index annuity (FIA) is. FIAs are agreements with an insurance company. This contract outlines conditions and terms as to how the money will be held, and when you might begin taking payments from it. In addition, your annuity contract details your rights, benefits, and duties are a party in the FIA. For instance, how long must your money remain in the annuity contract before income can be taken?

It is also possible to have a lifetime income from an FIA. Remember, an FIA protects your principal. If the market goes down, this does not negatively impact your money. However, you may also have the potential for indexed interestthrough indexed interest. Are fixed index annuities a smart purchase? For retirees who want the safety of their principal, lifetime income, and a reasonable rate of return**, they sure can be. Orfin & Associates works hard to help you understand your options.

Buying an FIA - Who's Involved?

So, who is who in an FIA transaction? 4 parties participate. Learning some details about how annuities work can help make retirement decisions. The more you know, the better the long-term strategy you can make. Here are the titles of those needed in an annuity purchase:

  1. Insurance Company – called the “issuer”
  2. A purchaser of Annuity – called the “owner”
  3. Person Receiving Payment from Annuity – called the “annuitant” (note: this is not always the owner)
  4. The Designee(s) Who Receive Death Benefit – called the beneficiaries

What's in an FIA Policy?

In the policy, there will be details about your specific purchase. For example, which type of annuity you have and how the policy works. Also, the contract will outline timeframes, terms, and conditions. For instance, will your annuity grow for 5 years, 10 years, or more? When can you take money out? Of course, other options, such as earlier withdrawals may exist in the policy, too. With most annuities, there is something called a “surrender period.” During that time period, the money is fixed in your FIA annuity contract. Afterward, you can begin to take an income. Your agreement describes the specifics. Contact us to learn more about the details of your policy.

Leaving a Legacy using a fixed indexed annuity

Certain products, such as some FIAs, let you leave an income death benefit to your spouse. Sometimes, there is even a survival clause. Many options exist in terms of benefits. For example, will your spouse receive a death benefit all at once? Or, will it be paid out over time? There are other possible options for leaving a legacy, too. It is a good idea to discuss your situation with a financial professional who can help. At Orfin & Associates, we are here to help. Reach out to learn about possible benefits for your loved ones. Protect your wealth and potentially leave your wealth to those you love.

Grandparents at Kitchen Island with Their Grandkids Are Fixed Index Annuities a Good Investment Michigan

Retirement Income

Look at the terms of your FIA. It will outline when income payments can start. Also, there may be a limit to how much you can take each year. Talk about these details with our team at Orfin & Associates. Certainly, some types of annuities have more choices than others, especially in terms of accessing money. However, all FIAs allow a period of growth and then the ability to collect an income. In some cases, people will take money out each year. In others, they take a monthly payment instead. Of course, everyone’s situation varies. The main point, though, is that you have options in terms of retirement income.


Looking to further understand the “who’s who” of FIAs or other types of annuities?

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