An indexed annuity-often called a fixed indexed annuity (FIA)-is a deferred annuity that credits interest tied to an external index, subject to caps, participation rates, or spreads, while protecting principal from market losses. The insurer invests premiums in its general account and uses options to support index credits. FIAs may include free-withdrawal provisions, surrender charges, market-value adjustments, and optional income riders that provide lifetime withdrawals. They appeal to clients seeking downside protection with measured upside potential and tax-deferred growth.

Clients seeking downside protection select FIAs, often with income riders. Advisors explain crediting levers, surrender charges, and market-value adjustments, then align allocations with time horizons and liquidity needs.