A Critical Examination of Indexed Annuities

Indexed annuities have long been a source of controversy and confusion due to their lack of transparency. This presentation will examine the annuity marketplace, specifically diving into the mechanics of a typical indexed annuity and its underlying investment strategy. Typical index crediting options will be examined within a historical context, including sensitivity to changes in cap rates. One hypothetical scenario will be presented where an indexed annuity could be a viable alternative. Finally, pros and cons of indexed annuities will be addressed.