"Is My Money Safe in a Fixed Indexed Annuity?"
A survey conducted by Financial Research Corporation revealed
that 36% of financial advisors said that more than half of their
clients had asked them about guarantees. The fact is that with the
risks associated with stock market investing and with the amount
of retirement savings clients have lost, their concerns about safety
have been heightened. So, how can I help clients understand how
the safety features of fixed indexed annuities are more secure
than just about anywhere else they could potentially invest their
Annuities put it in writing. Most other financial products don't
put in writing that the principal is guaranteed, fixed indexed
annuities do. You can go to the sales material and the contract of any fixed or fixed indexed
annuity, and they will include statements that money in the annuity is not subject to market risk,
that the interest credit can never be negative, and that the principal amount is guaranteed. The
only way the owner can lose principal is to choose to take premature withdrawals that would be
subject to a surrender charge.
Annuities are backed by all of the carrier's general assets. It is extremely irritating for clients
to see that they have lost a ton of money but their financial provider walks away losing nothing.
Fixed and fixed indexed annuities are not walled off from the carrier's general assets the way
assets in variable annuities or mutual funds are from their providers. Carriers providing fixed
andjixed indexed annuities are obligated to use all the carrier's general assets to make annuity
Annuity companies are strong. That is because annuity companies, as a whole, are
conservatively run, and are tightly regulated by state insurance regulators. Even the companies
that have been exposed to bad financial press in the past have subsidiaries that remain strong and
well-capitalized thanks to the legal and financial protections they were required to keep in place
for them by state insurance regulators.
Annuities arc backed by state guaranty associations. When I deliver the annuity contract to
my client, it will include a notice from their state guaranty association talking about how it backs
the annuity if the carrier fails. This is important protection, and it can help you feel more
comfortable with your decision.
Your regulator is local. Imagine that you have a problem with your bank or your stock
brokerage. Where is your regulator? The majority of these are regulated at the national level, so
you are dealing with a huge bureaucracy in Washington, D.C. If you have a problem with your
annuity provider, where is your regulator? At a much smaller, more accessible agency in your
home state. As a result, with annuities, it is simply easier for consumers to get a government
regulator involved if they feel the need, and that is a very important safety advantage of annuities.
There is no other financial product that combines all of these important safety features. The more
a consumer values safety, the more that fixed and fixed indexed annuities should appeal to them.
To find out more about this and other topics visit Tracy at
Or call him at: 1-417-429-0331
'The highest compliment I can ever receive is a referral from my clients and friends"