An Annuity is a vehicle to create income for your retirement.
You could decide between an Index Annuity or a Fixed Annuity,
Did you know that you could roll over your 401K into an annuity?
Index Annuity: NL/LSW
“Our indexed annuities use a formula to calculate interest that considers performance of an underlying index like the S&P 500 or the Russell 20001, without actual participation in the stock market. If the index goes up, you get the benefit of upside interest potential, but if the index goes down your principal and interest earned is protected from loss2. Secure plus Indexed annuities are guaranteed3 never to lose a penny due to a downturn in the stock market.”
Fixed Annuity: NL/LSW
How FIXED ANNUITIES Work
Life Insurance Company of the Southwest® National Life Group® is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of The Southwest (LSW), Addison, TX and their affiliates.
Each company of National Life Group is solely responsible for its Own financial condition and contractual obligations. LSW is not an authorized insurer in New York and does not conduct Insurance business in New York.
1. Guarantees are based on the claims paying ability of the issuing Company.We Collect Premium.We invest the premium.
Let’s look at an example using hypothetical rates of how we determine interest.
We receive an investment return on these “fixed income” assets.
Yield from the portfolio: 4% Retention to cover expenses, profit, and provide guarantees: 2% Amount available for interest crediting: 2%
The 2% could be used in one of the following two ways:
Traditional Fixed Annuity We declare the current credited rate for the
Policy to be 2%. Interest credited daily. Fixed Index Annuity
We declare an index rate of 100% and a cap
For money allocated to an indexing account in a fixed indexed annuity we could use the 2% interest to Purchase a call-spread option on an index:
• The option will pay 100% of the index gain
• Limited to a maximum of 4% with a floor of 0%
At the end of the year, we determine the change in the index:
• If up – we credit the index rate of the index gain up to 4% cap
• If down – the customer is not credited any interest during that period
A fixed indexed annuity may limit the amount of interest that may be credited in certain rising markets but
Against loss of premiums paid and interest earned in a market that declines over the
Fixed Index Annuities offer the potential to earn more interest than traditional Fixed annuities.
At the end of the day, the best way is to schedule an appointment, and review the options!