Debunking 12 Myths About Fixed Indexed Annuities

Debunking 12 Myths About Fixed Indexed Annuities

To mark Annuity Awareness Month this June, the Indexed Annuity Leadership Council is debunking  the top 12 myths about FIAs.

1. Myth: FIA policyholders assume risk

Fact: With FIAs, your principal can never decline in value due to index volatility


2. Myth: People buy FIAs for higher returns

Fact: People buy FIAs for safety of principal and guaranteed lifetime income


3. Myth: Companies keep value of annuities upon death

Fact: FIAs can allow proceeds to go directly to a beneficiary in the case of a death


4. Myth: FIA owners have no access to their funds to help in lifestyle changes

Fact: FIAs can include enhanced benefits. Riders and other contractual benefits are generally available to help consumers in a time of need.


5. Myth: FIAs are only for conservative savers

Fact: FIAs can be a key component of a balanced financial plan


6. Myth: FIAs are for more savvy savers

Fact: FIAs can be a retirement product for savers at any level


7. Myth: Any retirement account can help generate lifetime income

Fact: FIAs can guarantee a steady lifetime income stream


8. Myth: Withdrawing monthly from retirement accounts is the same as a FIA

Fact: FIAs offer the benefit of a steady lifetime income with minimum guaranteed interest credits


9. Myth: There are no tax benefits to FIAs

Fact: FIAs can offer tax-deferred growth


10. Myth: Only retirees purchase

Fact: Even younger savers are interested in FIAs, recognizing the benefits of growth and balance


11. Myth: FIAs are a risky way to save for retirement

Fact: FIAs protect your principal from the uncertainty of market volatility


12. Myth: FIAs offer no growth

Fact: FIAs protect your principal, while still giving you potential interest credits – assuming no early withdrawals


Source: Indexed Annuity Insights

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