Annuities
Who's Who In An FIA?
Who's Who in a Fixed Indexed Annuity?
One potential option for your retirement is a fixed indexed annuity, or FIA.
Before we explain the different roles and “who’s who” in an FIA, let’s briefly explain what it is. An FIA is a contract with an insurance company. The terms and conditions are defined within the contract. For example: How long will your money stay in the accumulation phase? What fees does it come with? What are the responsibilities the insurance company is required to uphold? Each FIA contract has its own specifics.
The Main Benefits of a Fixed Indexed Annuity
An FIA can be set up to provide you with guaranteed* income for life. Additionally, you may be able to earn reasonable rates of return** over time. However, the biggest benefit of an FIA is the safety it offers. In the event of a stock market downturn, your principal is kept safe. In this way, it differs from a number of traditional retirement accounts.
The Roles in an FIA
An FIA has three, sometimes four roles involved. You can meet with our team to learn more about FIAs and how they work. Getting educated before you make a choice in regards to your retirement is extremely important. And we put helping clients get informed first.
Now, here are the roles in an FIA contract:
- First, the issuing insurance company, who backs the terms of the contract with their claims-paying ability
- Then, there's the contract owner, who purchases the annuity
- The annuitant, who receives the income payments from the annuity (the contract owner and annuitant are typically the same person)
- Finally, the beneficiary or beneficiaries, who receive the death benefit from the annuity
Death Benefits From FIAs
As we stated, an FIA offers a death benefit. These agreements may provide you with a way to provide income payments, or one lump sum, to your spouse after your passing. You can also select the frequency of these payments. As you can see, there are a lot of options available with an FIA.
Income Payments
So, what about income? When can you take the income from your fixed indexed annuity? Well, this depends on the terms of your individual contract. How much money do you receive at a time, and can you take money out in case of an emergency? Additionally, when do you receive payments: monthly, yearly or quarterly? There are a lot of options and a lot of flexibility when it comes to an FIA. Reach out to us to get informed, so you can make the choices that are right for you.