Who’s Who in Fixed Index Annuity?

Fixed Index Annuity (FIA) is a highly popular financial instrument that offers accelerated accumulation of the principal amount. The financial instrument offers guaranteed income linked to the performance of stock market index. Moreover, FIAs provide you the assurance of a stream of income that will last throughout your retirement.

As with any other financial instrument, FIAs involves certain parties that include:

A. Insurance Company

An insurance company issues fixed index annuity. It is also responsible for the company that provides guarantee of the annuity.

B. Annuitant / Contract Owner

The annuitant is usually the annuity contract owner, but that is not always the case. The annuitant is the person whose life expectancy is used to determine the annuity payments. The contract owner, on the other hand, is the person that makes certain decisions about the annuity like selecting the beneficiary and the stock index linked to the FIA.

C. Beneficiary

The beneficiary is the person that will receive the death benefit of the annuity in case of uneventful demise of the annuitant. Specifying the beneficiary is important otherwise your annuity would be subject to a lengthy probate battle that can quickly dry up the amount.

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