The three primary advantages of all types of annuities are the guarantee of a steady stream of income over a period of time, deferred tax payment feature, and growth of saving. The security and safety of the principal amount is guaranteed, you can pass on the benefits of your savings and investment to your heirs, and you gain from stock market boom but remain protected from the downfalls. All these and many more benefits are offered by an equity-indexed annuity. The main feature of an equity-indexed annuity is that it is linked to a stock or equity index and earns the interest on the basis of this linkage.

While fixed annuities calculate and pay interest at a predefined rate that has been frozen in the contract, the rate of return or payment from an equity-indexed annuity is estimated with the help of a formula that decides how any additional interest will be estimated and paid to the annuity owner. This specific formula is based on the changes in the index to which the annuity is linked. However, the payment feature and proportion of the additional interest you may receive from a boom in the index is specified as per the features of the annuity you have purchased.

The equity-indexed annuities and a guaranteed return almost means the same because although your annuity investment is tied to the stock market, you never actually lose. The value of your annuity never drops below a specified amount. Therefore, your regular stream of income is always ensured. Also, the rate of return seems ensured and the insurance company adjusts the value of the equity-indexed annuity at the end of each period and estimates the gain from the linked index. In most other aspects, the equity-indexed annuity appears similar to the fixed annuity.

While considering the purchase of an equity-indexed annuity, consider your particular personal situation and the choices offered to you. You need to be alert and invest your best efforts during this time of decision making so that you can relax after you have made the purchase. You may not come across a particular annuity that offers all the features you had dreamed of. Therefore, it is important to find out the pros and cons of each annuity on offer and weigh their benefits minutely. Also, predict the future market behavior of an index accurately is a far-flung idea and hence, you have to be alert. For the best advice regarding market situations, a comparison of the best rates and annuity quotes, for more information on equity-indexed annuities, and to resolve any of your queries, you may Click here or call AnnuityLibrary.comtoll-free at 1-800-998-4056. Annuity experts at the AnnuityLibrary.comcan guide you on all aspects of purchasing, calculating gains, or comparing rates of various fixed and equity-indexed annuities. With all these at work, you are sure to pick up the annuity plan that suits you best.