It can never be taken away, regardless of future index performance. Annuities are designed for longer-term needs such as retirement. Equity Linked Index Annuities are not FDIC insured and have no bank guarantee. They are subject to the creditworthiness of the issuing insurance company. These contracts provide an appealing alternative to traditional life insurance policies that accumulate cash value.
Most policies provide an annual reset feature.
Cash value life insurance is purchased for long-term goals including retirement and estate creation. Value Added Equity linked notes and CD's trade in both the new issue and secondary markets. Since they are thinly traded in the secondary market, they usually sell at a discount to their underlying value. This is why we recommend these investments as a long-term hold. On the other hand, this scenario can provide attractive opportunities for long-term investors to purchase them at a discount.