Three things to know before buying one
Relatively new to the market, Index-Linked Annuities (“ILAs”) are a bit misunderstood. (For an example of an ILA, look at the Allianz Index Advantage ADV ILA). Like their cousins, fixed indexed annuities, ILAs offer upside potential with downside protection.
Both provide market participation via index-following crediting methods, and both allow investors to transfer risk to insurance companies. But the protections work differently.
With the Coronacrash earlier this year, and economic uncertainty caused by the global COVID-19 pandemic, investors have been seeking some safety, and sales of ILAs reflect that trend.
In this article for Kiplinger, RetireOne CEO David Stone tackles some of the big questions about how these “buffer” annuities work.
