An indexed annuity is a fixed annuity, either immediate or deferred, that earns interest or provides benefits that are linked to an external index reference or an equity index. The value of the market index might be tied to a stock or other equity index. The value of any index varies from day to day and is not predictable.

When you buy an indexed annuity you own an insurance contract. You are not buying shares of any stock or index.

An indexed annuity is different from other fixed annuities because of the way it credits interest to your annuity's value. Indexed annuities credit interest using a formula based on changes in the index to which the annuity is linked. The formula decides how the additional interest, if any, is calculated and credited. How much additional interest you get and when you get it depends on the features of your particular annuity.