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These articles contain tax and planning techniques that should be reviewed by your personal tax adviser to determine if they are appropriate for your particular situation and comply with local law. We are unable to render legal or tax advice to individuals.


The Ratchet Annuity tm

Otherwise known as the Equity Indexed Annuity (EIA).

One of the more popular annuities that lets you capitalize on gains when the stock market rises and protects your principal when the market declines. In that it is like a ratchet, it can go up one-way, but not down.

Your returns are hinged to the increase of the stock market. If the stock market goes down you do not lose any money, your original premium is provided protection.

With the last five years showing market instability, corporate scandals, cyclical stocks, security and safety are justifiably on most peoples' minds. Especially when your investments represent your life-savings. In lieu of burying your money in a safe under your house and buying a full-time guard dog, how do you obtain safety and security but still earn a decent return on your money?

You should look more closely at an equity indexed annuity.

Naturally, for the insurance companies to offer this guaranteed protection, they cannot give you the full benefit of a stock market upswing. Typically, insurers provide a rate that is a percentage (70-100%) of the S & P 500 index.

For that safety trade-off you give up a little. Some insurance companies, however, give you the full 100%.

Equity indexed annuities, 'Ratchet Annuitiestm', are attractive investments for conservative investors who want to fully protect their principal deposit (premium), earn a guaranteed minimum, and want to benefit from stock market upswings.
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