The explosion of index-based annuities
August 8, 2023 by John Forcucci
In recent years, the financial industry has witnessed a significant surge in the popularity of index-based annuities, marking a major shift in the retirement planning landscape. These innovative products offer individuals the potential for market participation while providing downside protection. However, alongside annuities’ rising popularity, a multitude of complex and arcane indexes have emerged to support these annuities, presenting both opportunities and challenges for investors.
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Wink’s Moore on the Market: I don’t know.
If someone said indexed annuities “offer individuals the potential for market participation…” would you think they are implying that the products offer market-like returns?
Certainly the statement, “mirroring the performance of specific indexes” does.
No bueno.
No one should be positioning indexed annuities in that manner.
SN: Indexed annuity purchaser are not investors. This is because indexed annuities are not investments; they are insurance.
And heads up- there are 169 different indices available on the 535 indexed annuities that are for sale today.
Just sayin’. – sjm
