What is the definition of Equity Indexed Annuity?
Equity Indexed Annuity is tax-deferred annuity that guarantees a minimum return plus interest. That interest is linked to an equity index, usually an international index or something like S&P 500. This investment protects the principal amount, while giving the annuity owner the opportunity to earn more than a fixed rate, based on the performance of the equity index. There is a cap to the interest rate provided (usually set at 8%).
The returns provided by this kind of annuity are generally higher than that provided by money market accounts, CDs or other fixed instruments. However, the returns are lower when compared to market returns. Thus, the Equity Indexed Annuity is best for those who would rather avoid risk, particularly those who are nearing retirement age.
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- Errors and Omissions Coverage (E&O)
- Escrow Account
- Excess and Surplus Lines
- Excess of Loss Reinsurance
- Exclusion
- Exclusive Agent
- Exclusive Remedy
- Expense Ratio
- Experience
- Exposure
- Equity
- Environmental Impairment Liability Coverage
- Endowment Insurance
- Endorsement
- Employment Practices Liability Coverage
- Employer’s Liability
- Employee Retirement Income Security Act (ERISA)
- Employee Dishonesty Coverage
- Elimination Period
- Electronic Commerce / E-Commerce