As with any investment, one makes a call based on risk and reward. Fixed Index Annuities continue to offer one of the best trade-offs in the market. However, it is still important that one stays abreast of what is happening in the market and what products are being offered as these change on an ongoing basis in response to the market and what demand is driving the insurance companies to offer.
For instance, as interest rates remain low, but the markets showed increases over the last year or two, clients are now looking to share in more upside but still want to be protected from downside risk. Here lies a perfect opportunity for the savvy insurance company and investor. Products are increasingly available that will allow one to share in more upside, either by way of limiting caps or by way of generous income riders. Either way, this is something to be considered based on one’s individual circumstances. No two investors are the same and one needs to be aware of what is available out there and what would best suit his or her particular circumstances.
As always, carefully balance the competing emotions of greed and fear. In a rising market there is a tendency to be driven by greed and a wish to share more in the upside, but one needs to temper this with the fear of losing one’s capital should things turn quickly. Again, annuities offer a perfect solution, and the more one is able to select the right annuity based on the particular circumstances both personal and market/economic, then the closer one gets to making the best choices.
It is always best to be guided by your advisor, he or she can find you the right ‘fit’ for your needs. The perfect product for you is out there, you just need to be guided in the right direction.
To learn more from this annuity profession, click here (Anton Hendler).
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