An indexed annuity, also known as a fixed-index annuity, is a type of annuity whose
income payments are tied to a stock index, such as the S&P 500. Indexed annuities
perform well when the financial markets perform well. People often refer to indexed
annuities as hybrids of fixed and variable annuities.
Annuities are contracts between purchasers and insurance companies. In most cases,
the annuity buyer is purchasing a steady income stream to fund retirement.