Indexed Annuities · Educational Guide
Considering an indexed annuity? Understand both the potential features and the trade-offs.
Indexed annuities are insurance contracts with crediting methods tied in part to an external index. Index participation does not mean you own an index or are invested in the stock market.
Planning-first, not product-first
Salem, NH — serving NH, MA, and New England
Educational, no-pressure conversations
Coordination with your CPA and attorney where appropriate
The basics
How indexed annuities generally work
A indexed annuity is an insurance contract. Interest crediting is calculated using a method described in the contract, which may reference the performance of an external index over defined periods.
Referencing an index is not the same as investing in it. You do not own the index or its underlying securities, and crediting is limited by the method and features in the contract, which may include caps, participation rates, and spreads.
- An insurance contract, not a direct investment in an index or in stocks
- Crediting calculated using a method defined in the contract
- Features such as caps, participation rates, and spreads can limit credited interest
- Optional riders may add features and additional cost
- Surrender periods and withdrawal charges typically apply
Trade-offs worth reviewing
- Crediting methods and features differ significantly between contracts
- Rider charges and other costs reduce contract values
- Liquidity limitations and surrender charges during the surrender period
- Tax considerations on withdrawals, depending on your circumstances
- Any guarantees depend on the insurer's claims-paying ability and contract terms
Before you decide
Questions to ask before choosing an indexed annuity
Exactly how is interest credited under this contract?
What caps, participation rates, or spreads apply, and can they change?
What riders am I being offered, and what does each one cost?
What is the surrender schedule, and what can I access without charges?
How would this be taxed when I take withdrawals?
What role would this play relative to my other retirement assets?
Guide
The Indexed Annuity Decision Checklist
A plain-language checklist for comparing crediting methods, caps, participation rates, spreads, riders, fees, and contract limitations.
What happens next
- 1We confirm your request and send the guide you asked for.
- 2A brief call to understand your situation and the questions on your mind.
- 3If it makes sense, we schedule a longer conversation. If not, you keep the guide and there is no follow-up pressure.
Questions people ask
Frequently asked questions
No. Crediting is limited by the method and features in the contract, and costs and charges apply. Any statement implying full market upside with no downside would be inaccurate. Read the contract features carefully and review them with someone who will explain the limitations.
Based in Salem, New Hampshire, Guardian Financial Services works with individuals, couples, families, and business owners throughout southern New Hampshire, Massachusetts, and the broader New England region.
Have a conversation before you make a decision.
A short, no-pressure conversation can help you understand the trade-offs and whether any next step makes sense for your situation.
Important disclosures
Index annuities are contracts issued by an insurance company that offer earning potential linked to participation in the growth, if any, of an index or benchmark.
All deferred annuities are long-term investment alternatives designed for retirement purposes. All annuity contract and rider guarantees, or annuity payout rates, are subject to the claims-paying ability of the issuing insurance company, which is solely responsible for obligations under its contracts. Withdrawals will generally be subject to a surrender penalty if redeemed during the surrender charge period and if they are in excess of any free withdrawal provisions. Since annuities grow tax-deferred, any withdrawals made prior to age 59 1/2 may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income.
The S&P 500 index is an unmanaged index of 500 widely held stocks. Investors cannot invest directly in an index.