With multiple "moving parts", often an index annuity is so complicated, the potential annuity buyer backs off and opts for something easier to understand - yet he is then giving up the potential for increases that rise along with the market.

Although index annuities have been extremely popular the last few years, we have hesitated to focus on them. Why?
The moving parts. If it was hard for us to keep track of them, then it didn't make sense to expect you to.

Minimum Interest Cap of 7%
The only IA  recommend has ONE moving part. And that single moving part is the interest cap. What does this mean?

It means that if the S&P index reaches or exceeds a 7% increase you will receive at least that 7% increase. (This interest cap can be raised but is guaranteed never to be lower than 7%. It can be increased depending on the cost of the options in the market place. As the volatility decreases, the cap rate should increase.)

The participation rate is 100%. That means that 100% of the increase, to the maximum cap rate, is credited to your account.

No asset fees. That means there will never be an annual fee.

It uses an Annual Point to Point with Reset. That means there is no "averaging"- if the index is 1000 the day your crediting term begins and 1100 the day it ends, then your gain is based on that full 100 point increase, NOT an average of the ups and downs during that period.
(We purposely avoid products that use averaging so you have the advantage of the true index increase. We believe this will almost always result in higher accumulation values). The annual reset feature "locks in" your gains year by year.

We aren't avoiding a "what if" worst case scenario event either. What happens if the market goes into a further tailspin? What if there are NO market gains over the life of the annuity? You lose nothing. Your full principal amount is returned at the end of the commitment term.* The worst of the worst is zero loss.

Most people don't understand the impact that a loss can have on an investment. Let's assume you lost 50% of your investment (something that has been experienced by many during the past few years). Do you know that you will have to earn 100%, not 50%, to reach the "break-even" point? Are you willing to give up some of the upside potential to make sure that you do not lose any money?

( I know it's long, but once you "get" the concept of an index annuity, you will understand this product's exciting potential.)

A $100,000 premium
100% Participation
No asset fees
7% cap ( can go higher but never lower)
Point to Point
Annual Reset

Year One: July 1,2003 S&P is 1000.

Year Two: July 1, 2004 S&P Index is 1100. Increase of 10%. Your account value is now $107,000 ($100,000 plus 7% maximum credit). Now the minimum amount you will get back at the end of the term regardless of any future negative S&P movement is $107,000 - NOT $100,000, since your account value can never decrease after an anniversary "lock in".
The S&P Index is reset at 1100.

Year Three: July 1, 2005. Oops! Market drops 30% to 770!
What happens to your money? You still have $107,000 in your account.
Remember, once you have the money in your account, it stays there. Now the annual reset "resets" the starting point to 770.

Year Four: July 1, 2006. The Index increases by 10% from 770 to 847 . Please note that this is well below the 1st year beginning Index of 1000 and the highest Index of 1100. But because of the reset feature, your account is credited again by 7% to bring the account value to $114,490. Your minimum guaranteed principal is now $114,490.

You lost nothing in the down year, and the annual reset protected you from having to wait for the index to climb back up to your original starting point. This is how the program works for the balance of the contract period.