Fixed Indexed Annuity
When an annuity’s capital appreciation potential is tied to the performance of an index, it is referred to as a fixed indexed annuity (FIA). Fixed indexed annuities are also commonly referred to as equity index annuities (EIA) or simply indexed annuities (IA). Generally, the annuity’s losses are limited while a portion of its gains are tied to the individual equity index’s returns. Some common indexes include the S&P, DIJA and the NASDAQ. With a fixed indexed annuity: 1) the money can go in as a single premium payment or a series of payments; 2) the money is invested at a variable rate although there is a guaranteed minimum rate of return that provides a floor, and; 3) payments begin at a future date and are at a fixed rate that is based on market performance and is supported by the guaranteed minimum rate.
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Slides from David Babbel's Fixed Indexed Annuity Study - Recent Historical Evidence
This is a follow-up on two previous entries that discuss the fixed...
Professor David Babbel Fixed Indexed Annuity Study
Submitted by tom on
I received the following question from MJM in Hawaii:
Where did you finally locate the actual study I have looke everywhere and cannot find it Thanks, mjm in Hawaii
I could not find the study anywhere online either. Professor Babbel was kind enough to provide access to it.
I will be publishing some of the specific results early next week.
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The Fixed Indexed Annuity Study from Wharton Professor David Babbel
There is in fact a study from Professor David Babbel that compares the performance of fixed indexed annuities to portfolios of stocks and bonds and it is fascinating.
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