Who's Who in an FIA?
Who's Who in an FIA?
A fixed indexed annuity (or FIA) is a contract between a person and an insurance company.
The contract outlines the details of their agreement. So, the rights and responsibilities each party has, how long the money will need to stay in the annuity, and the way the interest rate is calculated are all determined by the terms of the specific contract. It’s possible to secure an income for life using an FIA. They can be set up to allow you to gain a reasonable rate of return** with guaranteed* protection of principal, regardless of what happens in the market.
Does an FIA Come With a Death Benefit?
Certain annuity products, FIAs included, offer a death benefit to your spouse or other beneficiaries. There are quite a few options available to you when it comes to a death benefit. For example, you may decide to have the death benefit paid as one singular lump sum. Or, you may have it set up so that your spouse receives it as a series of regular payments. Whichever option you choose, be sure that you understand all the specifics. In fact, we’d be happy to answer your questions and help you understand how fixed indexed annuities work.
Whichever option you choose, be sure that you understand all the specifics. In fact, we'd be happy to answer your questions and help you understand how fixed indexed annuities work.
Several details do, however, come down to the individual contract and how it is set up.
Who's Who in a Fixed Indexed Annuity?
Three (sometimes four) parties are involved in an FIA contract. These four roles are:
- The issuing insurance company that issues the annuity and backs all of its claims
- The contract owner, who purchases and contributes the money to the annuity
- The annuitant, who receives the payout from the annuity (typically, the contract owner and annuitant are the same person)
- The beneficiary or beneficiaries, who receive a death benefit from the annuity after the annuitant passes away
