FIA Fact or Fiction?

An FIA is a Fixed Indexed Annuity. Many people shudder when they hear the word “annuity” but the reality is that many people are confused as to what an FIA is and what it actually does. An FIA is a tax deferred opportunity to enjoy all of the upsides of the market without the risks associated with market volatility.

FACT: The only annuity that is an “investment” is a variable annuity. Variable annuities are securities subject to SEC regulations. FIAs are safe insurance products subject to regulation by the insurance commissioners in each of the 50 states.

 FICTION: Fixed Indexed Annuities are investments.

 FACT: The value proposition of an FIA is allowing the purchaser to have very limited participation in the market’s upside, while avoiding the downside risks associated with the market.

 FICTION: The value proposition of an FIA is sharing in the upside of stocks with no downside.

 FACT: FIAs offer penalty free access to 10% of the funds each year (some offer more).

 FICTION: FIAs have zero liquidity, if I put my money into an FIA, my money is “locked up” and I have no access to the funds until the surrender period is up.