Posts Tagged ‘ Index Annuity ’

Senior Finances 101: Understanding Annuities #5

Oct 14th, 2010 | By Sharon Shaw Elrod MSW EdD | Category: Senior Moments Blog

The Index Annuity is the final in the series SCJ is publishing about annuities. This is an attempt to distill the information about annuities for senior citizens so we all can understand what they are and whether or not they make investment sense for our individual circumstances.

In the mid-90s, insurance companies created still another kind of annuity that is based on index funds in the various stock markets. Index funds are a small group of mutual funds that are purported to be a gauge of the entire stock market, and are considered ‘safer’ investments than the gamble taken with non-index funds. Index Annuities start out just like others, a contract with an insurance company for a definitive time period. Then, the index annuity is based on one of the Indexes (S & P 500, Dow Jones Industrial Average, etc) and your annuity