FAQ

No. The insurer credits interest using a formula tied to an index change. You do not own the index or the stocks in it, and dividends are usually excluded. The SEC’s July 31, 2020 bulletin is the source, including its illustration that a 7 percent total return with 2.5 percent of dividends would leave many formulas using 4.5 percent. That illustration is not a typical yield. Read what it is.

You can receive less than you paid if you leave during the surrender period. The SEC and FINRA both say so. A down index typically does not, by itself, reduce the account if you do not withdraw; the NAIC guide says that term’s credit is typically zero, and interest already credited is usually locked. A registered index-linked annuity is different and can lose principal. Do not mix the two. See risks.

This site does not publish one. Caps, participation rates, and spreads change by contract and at renewal. The only percentages we repeat are labeled hypotheticals from the SEC and FINRA, such as a 7 percent cap on a 12 percent index change. They are not averages. See cap, participation, and spread.

No. FINRA’s July 14, 2022 article described a usual minimum rate of 1 percent to 3 percent on at least 87.5 percent of premium. NAIC Model 805’s formula, after the fall 2020 change, can be as low as 0.15 percent before an extra reduction for an equity-index benefit. State law can differ. That floor is not the same thing as the index credit. See who regulates them.

The SEC says often six to ten years or longer. The NAIC says the charge usually declines each year. Your contract has the actual table. New York publishes a legal maximum schedule for equity indexed annuities. That schedule is New York’s, not the nation’s. See surrender charges.

No. FINRA says annuities are not FDIC or SIPC insured. FDIC insurance covers bank deposits, including CDs, generally to $250,000 per depositor, per insured bank, per ownership category. If an insurer fails, a state guaranty association may cover annuity benefits up to a limit that varies. NOLHGA says most provide at least $250,000 in present value. New York describes up to $500,000 for a New York resident’s fixed benefits. That is not a reason to buy. See the CD comparison.

No. They are generally tax-deferred, and withdrawals of gain are generally ordinary income. From a nonqualified contract, amounts not taken as an annuity are generally income first, under Revenue Ruling 2007-24. Before age 59½ an additional 10 percent tax may apply to the taxable part unless an exception applies. Use Topic 410, Publication 575, and the Form 5329 instructions. Do not copy a 401(k) separation-from-service exception onto a nonqualified annuity. Inside an IRA, the annuity usually adds no extra deferral. Traditional IRA required distributions generally start at 73. See taxes.

An exchange of one annuity for another can be tax-free if it goes from insurance company to insurance company. If you receive the check, it is not a 1035 exchange. A replacement can still start a new surrender-charge period. See taxes.

This site will not answer that. A bonus percentage without the surrender schedule and the renewal guarantee is an incomplete fact, and this site does not know a typical bonus. A cap can change later. Start with questions to ask, not with a ranking.

Not by virtue of this website’s description. Many states have adopted the NAIC’s 2020 best-interest revisions to Model 275 — 49 jurisdictions as of August 8, 2025, in the NAIC’s brief. New York was not on that list; it has Regulation 187. The model says it does not by itself create a private lawsuit or a fiduciary duty. See regulation.