Bring this list to a meeting. Write the answers in the margin of the specimen contract. If the answer is only in a brochure, ask where the contract says the same thing. A fixed indexed annuity is whatever the contract says, plus the state law that applies to it. It is not whatever a confident explanation added.

The formula

  • What index is used, and does the formula include dividends? The SEC says dividends are usually excluded. Confirm this contract.
  • How is the change measured: two dates, an average, or another method written in the form? How long is the term?
  • What is the cap, participation rate, or spread for the first term? Which of those can the insurer change later, and what is the guaranteed minimum? FINRA says the limits may change.
  • If the index is down and you take no withdrawal, is the credit zero? The NAIC guide says that is typical. Make them show you the sentence.
  • If you withdraw during the term, do you forfeit uncredited index interest?

The exit

  • What is the surrender charge in each year until it is zero? The SEC says the period is often six to ten years or longer. Your schedule might differ. You need yours.
  • Can the charge leave you with less than the premium? Ask for an example using your premium, and label it as an example.
  • Is there a free-withdrawal percentage? The NAIC says some contracts waive charges on small withdrawals, for example 10 percent or less, usually up to 10 percent. If yours has a number, what is it a percentage of?
  • Is there a market-value adjustment? The NAIC says an MVA can increase or decrease the payout and is not on every contract.
  • How many days is the free look, and is the refund the premium or the account value? Often 10 to 30 days, and it depends on the state.
  • If you are in New York, ask the producer to reconcile the contract with the department’s maximum withdrawal-charge table for equity indexed annuities. That table is a New York legal maximum, not a national typical rate. Also ask how New York treats a death benefit, which the department says is not a surrender.

Bonuses and riders

  • Is there a bonus? On what dollars? What happens to it if you surrender in year one and in the year the charge ends? Do not accept a percentage without those answers. This site does not supply a typical percentage.
  • If there is a lifetime-income rider, what is the charge, can the charge increase, and is the income base the same as the cash surrender value? The NAIC says it is not the same, and it does not publish a standard fee.
  • What happens to the rider income if you withdraw more than the allowed amount?
  • What would annuitization pay, as a separate quote from the rider?

Tax and the account you would use

  • Is this nonqualified money or IRA money? If it is IRA or 401(k) money, what tax deferral does the annuity add that the account does not already have? FINRA’s answer, in general, is that it usually adds none.
  • If it is a traditional IRA, how will you take a required distribution that starts, under the IRS page, at age 73, if a surrender charge still applies? Roth IRA owners are not required to take those lifetime distributions.
  • If you are under 59½, have you read Topic 410 and the Form 5329 instructions rather than a list of exceptions from the producer? Do not apply a separation-from-service exception to a nonqualified annuity.
  • If this replaces another annuity, will the money move insurer to insurer? If you receive the check, Revenue Ruling 2007-24 says it is not a 1035 exchange. What new surrender period starts?

The company and the salesperson

  • What is the insurer’s full legal name, and which state department licenses it?
  • Is this contract a security? If someone mentions a buffer, a floor, or a prospectus, stop and read why a RILA is different. Securities can lose principal.
  • How is the producer paid? You may not get a useful number. You are still allowed to ask whether the pay differs between the two contracts you are comparing.
  • Which suitability rule applies in your state? Many states use a version of NAIC Model 275. The model does not by itself create a fiduciary duty or a private lawsuit. New York uses Regulation 187 and was not on the NAIC’s August 8, 2025 list of 49 jurisdictions.

If you leave with blank lines, you are not ready to sign. The FAQ has shorter versions of the same points.

Sources

Not advice. IndexedAnnuity.com is not an insurance company, agency, broker-dealer, or tax advisor. Nothing here is a recommendation to buy, hold, or replace a contract. Guarantees exist only in a specific contract and depend on the insurer’s ability to pay. Products and state laws differ. Read the contract.
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