INDEXED ANNUITIES:
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The great thing about Indexed Annuities is that they let the owners participate in the gains of the
stock market but not in the downtrends of the market.  When the market goes up, an indexed
annuity credits a portion of that upward move to the owner, in the form of an interest payment, but
when the market goes down the annuity will hold it's last "locked in " value.

Indexed annuities came into existence in 1995.  They are considered a fixed annuity because they
guarantee that you cannot lose money, in most cases they even guarantee that you will make at
least a little money. They also guarantee that once earnings are credited to the account you can
never again lose that money either.  It's that last part of the guarantee that makes these contracts
so unique and valuable.  It is also the part that helps the returns on these contracts keep pace or
even ahead of other popular investments.  I'd like to take the time to explain this a little further.


























So let's take a look at some of the phrases that have already been used and are unique to this
product, as compared to all other financial instruments.

PARTICIPATE IN THE GAINS OF THE MARKET:
There are many methods by which insurance companies can determine how they are going to
determine how much interest to credit to an indexed annuity product.  We will discuss here some
of the most popular methods.

MOVING PARTS:
It's the "moving parts" that make it so hard to understand indexed annuities and compare them
against each other.  There are three basic moving parts and they can be used either singularly or
in combination with each other. The three parts are: Participation rate, Caps and Margins.

Participation rates:  This us usually used in the "point to point" methods.  They are always stated
as a percentage.  Some examples would be 55%, 45% or 60% and what they mean is that if the
market did 10%, over the specified time period, you would get that percentage of the market.  So if
you had a 60% participation rate your contract would be credited 6% for that time period.

ANNUAL POINT TO POINT:
This was the original method used by most insurance companies and is still used today.
The way it is determined is they take  the price of the S&P 500 is on the day the money is activated
into the index.  Then they take the price on the last trading day before the anniversary of the
contract. They then subtract the ending number from the beginning number, take that answer and
divide it by the beginning number. That gives you the percentage of change in the S&P 500 for that
fiscal year.  Then they apply the interest to the annuity according to the terms of the contract.  Here
is where many of the variations start.



                                                Sorry this is still under construction
                                                I am constantly working on it and adding to it.
please check back soon or give me a call I would be glad to explain the rest to you
Sample $10,000 account

Year        Percentage             S&P 500 Mutual Fund             S&P 500 Indexed Annuity
                    Move                                                                                60% Participation
                                                                                                                no Cap

start                ----                                $10,000                                        $10,000

1                        10%                            $11,000                                        $10,600

2                          15%                          $12,650                                        $11,554

3                        (8%)                            $11,638                                        $11,554

4                        (12%)                          $10,241                                        $11,554

5                          20%                           $12,290                                       $12,940

These numbers are completely fictional and are just being used as an example
to show how NOT participating in the down turns and only participating in 60% of
the upward movements can still produce excellent results.
To provide our clients with the
information needed on the product
or service that is of interest to them
so that they can make a wise,
informed decision