Fixed Indexed annuities credit interest based on the movement of the stock market index that you choose. The Stock Market index tracks the performance of a group of stocks representing a specific market segment or the entire stock market. The S&P 500 is one index most commonly used for this purpose. However, other indexes may be used, such as the Dow Jones Industrial Average, NASDAQ 100 or Russell 2000, Hang Seng, S&P Midcap 400 or a feature known as the Inverse Performance Trigger.

### Fixed Indexed Annuities in Maryland, Washington D.C. and Virginia

Maryland Annuity Resource offer Fixed Indexed Annuities in Maryland, Washington D.C. and Virginia. Fixed Indexed Annuities are the foundation to any investment portfolio but it is important to know the features, benefits and contract guidelines to these products. We will outline some of them below.

### Fixed Indexed Annuity Objectives

In the process of planning for financial security in retirement, a fixed indexed annuity can help satisfy two basic objectives:

- To accumulate retirement assets on a tax-deferred basis. If you’re already contributing the maximum to IRAs and any employer sponsored retirement plans and need to save a lot more for retirement, a fixed indexed annuity may be the perfect answer to your retirement savings need.
- To convert retirement assets into an income that you cannot outlive. If you’re near or at retirement, an immediate income annuity can be used to convert existing retirement assets into a lifetime income and provide income for your spouse through spousal continuance provisions.

#### A Fixed Indexed Annuity is a long-term savings plan that can be used to accumulate assets on a tax-deferred basis for retirement as well as to convert retirement assets into a stream of income you cannot out live.

Fixed Indexed Annuities have two distinct phases: the accumulation phase and the income phase.

- During the accumulation phase, you can contribute unlimited premiums to a non qualified annuity, or IRS guideline limits for qualified plan annuities where they accumulate on a tax deferred basis until needed for income purposes.
- During the income phase, the value of the annuity is converted into income payments and paid out for either life or a certain period of time.

### Immediate Income Annuities

An immediate income annuity is purchased with a single premium and income payments begin immediately or shortly after the premium is paid and the contract is accepted.

### How are Fixed Indexed Annuity Premiums Invested?

Depending on your overall investment objectives and risk tolerance, there are a variety of ways you can choose to invest your annuity premiums:

**Fixed Indexed Annuities –**An indexed annuity has characteristics of both a fixed annuity and variable annuities. Like the variable annuity, the insurance company pays a rate of return on annuity premiums that is tied to a stock market index, or multiple indexes. Like fixed annuities, indexed annuities also provide a minimum guaranteed* interest rate on the fixed account, and floor/rate caps on indexed accounts.However the minimum guaranteed interest rate is combined with the interest rate linked to a market index, indexed annuities have the potential to earn much greater returns than fixed annuities when the stock market is rising or declining while using the inverse performance trigger option. Asset or Index allocation allows you to change your choices usually once a year at contract anniversary.**Fixed Indexed Annuities**have two accounts, a fixed account, and a index account. There are also many Income rider options to choose from.

#### Fixed indexed annuities are insurance contracts, not an investment in the stock market. Fixed indexed annuities credit interest using a formula based on changes in the index in which the annuity is linked. Interest payable in excess of the minimum guaranteed interest rate is determined by a formula contained in the annuity contract. This formula is determined by a variety of indexed annuity contract features, including:

**Indexing Method**: Crediting methods are different methods used to determine the change in the index over the period of time you have the annuity. The indexing method used will impact the amount of interest credited to the contract. Some examples are monthly point to point, and annual point to point.**Participation Rates**: An indexed annuity has an 40% participation rate, the annuity will be credited with only 40% of any gain experienced by the index.**Spread/Margin/Asset Fee/Income Rider**: Fixed indexed annuities may contain fees like a spread/ margin/asset fee instead of, or in addition to, a participation rate. These fees for example an income rider are deducted at contract renewal depending on the contract.**Interest Rate Caps**: Fixed indexed annuities contain a rate cap or upper limit on the amount of interest the annuity will earn. There are also floor rates which some contracts allow a known minimum percentage of interest earned in a worse case scenario. Bonus annuities have lower floor and rate caps.

### Why should I invest in a Fixed Indexed Annuity?

Fixed Indexed Annuities provide the opportunity to benefit from potential gains in the stock markets but not the losses, while paying a stated minimum interest rate during market downturns. Fixed Indexed Annuities are a compromise between a fixed annuity and a variable annuity. We do offer variable annuities due to the potential for loss of initial principle.

Fixed Indexed Annuities may be optimal for you if you want to participate in the potential gains from the stock markets, while limiting your potential downside during market volatility. Fixed Indexed Annuities may be best for you if have time to take a lower risk so please understand that a rate of return linked to stock market performance provides the potential for higher returns than fixed interest investments. The only loss potential is canceling the contract and incurring surrender charges.

### Annual Reset Feature

The Annual Reset of Fixed Indexed Annuities allows an Interest Credit, if any, to be added to the index account on each annual contract anniversary. That amount, when added, becomes “locked-in” because it can never be taken away due to negative index performance. Once added, the “locked in” Interest Credit will participate in future growth, giving you the advantage of compounding in subsequent years.

This feature also resets your starting index point each year on your contract anniversary. Annual Reset minimizes your risk when the index experiences a severe downturn during the year. You then can take advantage of gains from that point forward. Without this unique feature, you would have to wait for the index to climb up to its original level before any gains could be realized.