Why Is An Equity Indexed Annuity Considered To Be A Fixed Annuity? 
The word `` equity '' tends to lead to a bit of confusion in the definition . An equity indexed annuity is not actually invested in the stock market . An index such as the S&P 500 would be referenced over a specified period of time -LRB- such as one year -RRB- and if the index has increased in value , your annuity would be credited interest . One of the advantages of an indexed annuity is that if the referenced index declines over any year , you would not lose any value as a result . You would simply not be credited with interest for that year . 