Equity indexed annuities offer the best of all world’s to the annuity buyer. They increase in value when the market rises but they don’t lose money if the market drops. To make it even better, members receive a fixed interest rate promised in the contract. Most indexed annuities use the S&P 500 as their benchmark. Some companies offer as high as ninety percent of the growth while others offer as little as fifty percent.

Equity indexed annuities with the lowest percentage of market participation make up for the difference by offering a higher guaranteed interest rate. Make sure your indexed annuities offer an annual reset option. Every year, the policy will reset itself to the accrued amount as the base.

Some carriers use point-to-point contracts. The carrier calculates the growth from the day you started the contract to the day when the contract term ends.  Including any large gains or losses over the contracts term.

Equity indexed annuities are good for retirees that want to keep up with inflation but still require safety.