An equity-indexed annuity is a contract between an investor and an insurance company. The investor makes either a lump sum payment or a series of payments, and the insurance company credits the investor with a return that is based on changes in an equity index, such as the S&P 500 Index. The insurance company typically guarantees a minimum return, which can vary.
After the lump sum payment or the series of payments are completed, the insurance company makes periodic payments to the investor under the terms of your contract, unless the investor chooses to receive a lump sum value based on the contract’s terms. Equity-indexed annuities are complicated products. You should understand how the index-linked interest rate is calculated before you buy the product.
Equity-Indexed Annuity and Losses
Can you lose money buying an equity-indexed annuity? Notwithstanding any representations of absolute safety, you can lose money in an equity-indexed annuity. If you need your money and need to cancel your annuity early, you may have to pay significant surrender charges and tax penalties. Even with a guaranteed return, you can still lose money if the guarantee is based on an amount that is less than the full amount of the investment. It can take several years for an annuity’s minimum guarantee to “break even.”
Contact a Securities Fraud Lawyer
Did your stockbroker, bank or brokerage firm mislead you and urge you to invest in unsuitable equity-indexed annuities? Our Miami equity-indexed annuities attorneys advise and represent clients from throughout Florida, including in communities such as Ft. Lauderdale and West Palm Beach, regarding all types of securities fraud.
Through offices in New York and Los Angeles, we also represent investors in New York and California, and throughout the United States, Mexico, Brazil, Argentina, Venezuela, and through Central America and South America.
Recover Your Investment Losses
Discuss your investment, your losses, and your potential to recover your investment through securities arbitration with an experienced lawyer. Attorneys of Dimond Kaplan & Rothstein, P.A., have helped many investors who were talked into purchasing inappropriate investment products such as equity-indexed annuities. Contact us today for a free consultation at 888-578-6255.