Equity Indexed Annuity of the Week – April 6th

Apr 7, 2009 Annuities

An Equity Indexed Annuity provides returns that are based upon the performance of a major stock market index.  You agree to keep your money in the annuity for a certain period of time in return for safety of principal, a minimum guaranteed interest rate and the potential for growth linked to the performance of the index. 

The most frequently used stock market index is the S&P 500.  In addition to  upside potential and safety of principal, your earnings will grow tax deferred.  However, if you withdraw you money prior to age 59 1/2, a 10% penalty may apply.  The insurance company will also provide you with a death benefit and options for how you can withdraw income when you reach the end of the specified term that you select.

Our Equity Indexed Annuity for the week is the ING Secure Index Annuity 7.  The first year cap on this product is 9%.  What this means is that if at the end of the first year the S&P 500 is up 10%, 9% will be credited to your account.  Your money is not actually invested in the S&P 500, it is just used as a measure to determine how much interest is credited to your account.  The % cap is declared annually and can go down.  You can never earn more than the declared cap in any given year.  However, once interest is credited to your account, it is locked in.  Your principal and any interest credited is protected from any stock market declines.  If the stock market goes down in any given year, you will not earn any interest, but you will not lose anything either.  Currently, the minimum guaranteed rate over the length of the term for this product is 1%.

Beginning in the second year, 10% of the accumulation value (as of date of withdrawals) may be withdrawn without a surrender charge.  Any withdrawals above the free withdrawal amount will be subject to a surrender charge. 

ING USA Annuity
Secure Index Seven

  100% Participation
No Spread/Margin Fees

9.00% Annual Cap

S&P 500 Point-to-Point

7 Year Surrender Term

A+ (Superior) Rating from A.M. Best

Tags: Equity Index Annuities, Equity Index Annuity, Equity Indexed Annuities, Equity Indexed Annuity, Index Annuities, Index Annuity