By Jim Poolman
Myth: Indexed annuities are overly complex.
Truth: The reality is that having choices is good for consumers. That being said, all fixed indexed annuities share the same basic chassis, which is very simple: in periods (typically one-year) where the index declines, they protect principal and all previously credited interest from loss – the annuity owner earns zero interest. In periods where the index increases, they credit an interest rate which is a simple calculation of the index increase. Each annuity owner can easily calculate their own interest or view their annual report which is simple and easy to understand.