Fixed Index Annuities often include Price Return and Excess Return volatility-controlled indices within their allocation options. Understanding how these are measured and what makes them different from one another is essential for making informed allocation decisions.
In FIAs, Price Return and Excess Return Indices offer distinct performance measures, and their varying sensitivity to interest rates impacts renewal caps and participation rates. Price Return Indices track an index's price changes over time, while Excess Return Indices measure the return above an expected benchmark growth rate.
In this episode of Money Script Monday, Sean details the differences between Price Return and Excess Return Indices, helping you navigate FIA allocation options and their implications.
Resources Provided for This Episode
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