Why Is An Equity Indexed Annuity Considered To Be A Fixed Annuity? 
That is an excellent question ! This type of annuity confuses a lot of people because of its ' link to the markets . It is easy to think that your annuity is based on the purchase of stocks , and thus subject to the gains and losses of that stock . In reality , with this annuity , you purchase nothing in the market . Your gains and losses are based upon the upward or downward movements of the market itself . The annuity has guarantees that help keep you from losing money when the market goes south , and pays a fixed interest amount based upon your contract specifics and the amount of upward growth the market has made . So like a traditional fixed annuity , you are guaranteed to not have less than you started with , and generally earn a guaranteed interest rate -LRB- that may change over time , but is defined in the contract through floors , caps and participation rates -RRB- . I hope that helps , thanks for asking ! 