Structured Annuities


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What is a Structured Annuity?

A Structured Annuity is a variable annuity contract with an insurance company where your rate of return is based on an Index that can increase or decrease over the Term and have any decrease protected up to a set amount.

Things to Consider

Terms are typically offered from 1 to 7 years and are measuring periods within the length of the contract; and each Index and Term will come with a few Protection Level/Cap Rate choices.

At the end of the Term the Protection Level will refund any account decrease up to the level of protection as well as limit gains via Cap Rates that vary depending on the Term and Protection Level.

It is possible that the Index losses exceed your Protection Level and you lose some of your investment principal; and Cap Rates can limit your gains if the Index increases above the Cap Rate levels.

Typically, longer Terms offer higher Cap Rates however, Cap Rates are reduced as Protection Levels increase. The lower the Protection Level the higher your potential Cap Rate can be and the greater the Protection Level the lower your potential Cap Rate can be.

Standard Structured Annuities offer tax-deferred gains and some offer a return of principal less withdraws to your beneficiaries if you pass away.

Fees and Expenses

Some contracts have fees and expenses such as administrative fees, investment management fees and other fees that can vary with performance and some offer no fee options. If you buy your annuity in an IRA, there can be an IRS penalty of 10% to make withdraws prior to age 59 ½ and all contracts have cancellation fees known as Surrender Charges.

Be sure to read over the contract and prospectus carefully before you invest and consult with your AnnuityNest expert to determine if a Structured Annuity is right for you.


Variable annuities are long-term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. They are sold only by prospectus. Guarantees are based on the claims paying ability of the issuer. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.