Index Annuity Rates - What Are Today's 5-Year Index Annuity Rates?
According to Darcy Bergen , index annuities relate interest to movements in equities indices, so as the market's main stock indexes rise, so does the annuity. Index annuities, on the other hand, never lose any of their principle or already credited interest. The highest index annuity rates exceeded 40%. Then, in 2008, when the stock market plummeted and interest rates were historically low, the index annuity tied to these indexes was credited with 0% for the year, but the investor lost none of their original investment. Index annuity contracts have a cap rate that limits the amount of interest that may be credited to the account. Cap rates typically vary from three to nine percent. Another option is yearly point-to-point crediting, which needs an 80 percent participation rate and a 10% rise in the underlying index. The risk tolerance of an insurance company may be used to establish the cap rate of an annuity contract. Fixed index annuities may also be arranged to provide complete p