Fixed Indexed Annuity (FIA)

While labeled an annuity, Fixed Indexed Annuities are primarily sold for their accumulation, or wealth-building, potential as opposed to their ability to create income streams. The premium paid into a FIA gets invested in market indices of your choice, with gains from the growth of those indices accumulating tax-deferred. Typically, the FIA will offer principal protection so that you don’t lose money, but it will also charge high annual fees that significantly reduce your money’s growth. FIAs also offer Income Riders, at a cost, which will create a stream of income payments starting in the future.