Annuities
Fixed Indexed Annuities
Principal protection with growth opportunity.
RM Legacy Group offers access to Fixed Indexed Annuities (FIAs) from leading U.S. insurance carriers. FIAs are designed for individuals seeking measured growth potential with protection from market loss. Each contract blends principal protection, tax-deferred accumulation, and lifetime-income options, with select programs providing an initial premium bonus sometimes up to 40 % on eligible allocations.
How FIAs Work
• Principal Protection: Account values never decline due to negative index performance. Principal remains safeguarded, subject to contract terms.• Growth Credit: Interest is linked to an external index — such as the S&P 500® — and determined by the carrier’s cap, participation rate, or spread. Rates may adjust periodically; future values are not guaranteed.
• Tax-Deferred Growth: Earnings accumulate without current taxation until withdrawn.
• Guaranteed Income Option: Optional riders can convert contract value into lifetime withdrawals for an individual or couple, based on selected features and rider costs.
• Estate Efficiency: Beneficiaries can typically receive proceeds directly, often bypassing probate. Tax treatment follows federal and state law.
• Premium Bonus Potential: Some carriers credit an upfront bonus ranging from 10 % to 40 % to the income base or, less commonly, to the account value. Bonuses may vest over time and are generally accompanied by longer terms or lower ongoing crediting rates.
Interest Crediting Method
Premium Allocation
Funds are distributed among fixed or indexed strategies
Crediting Formula
The insurer applies a cap, participation rate, or spread to determine credited interest based on index performance. These may change in future contract years.
Zero Floor
If the index is negative, interest for that period is 0 %—protecting prior gains.
No Direct Market Exposure
FIAs track an index but never invest directly in it or pay dividends; the index serves only as a performance benchmark.
When an FIA May Be Appropriate
Pre-Retirement
Helps preserve accumulated gains and reduce volatility before retirement.
Retirement Income
Offers predictable, lifetime income options through guaranteed riders.
Portfolio Diversification
Adds a principal-protected, tax-deferred component to balance market assets.
Legacy and Estate Planning
Coordinates with trusts and insurance strategies to streamline wealth transfer.
Understanding the Premium Bonus
Strategic Use in Portfolio Transitions
Converting inefficient assets into protected, tax-efficient structures.
Advantages
- Offsets transition costs through credited bonuses.
- Preserves tax deferral via qualified trustee-to-trustee rollovers.
- Strengthens lifetime income potential as bonuses compound within the income base.
- Improves portfolio stability by removing direct market risk.
Considerations
- Surrender periods (typically 5–10 years) limit early withdrawals.
- Liquidity is restricted to about 10 % penalty-free per year.
- Withdrawals before 59½ may incur tax and IRS penalties.
- All guarantees depend solely on the issuing carrier’s financial strength.