What is the minimum guaranteed growth rate typically associated with Equity Indexed Annuities?

Equity Indexed Annuities (EIAs) are a type of fixed annuity that provides returns based on the performance of a specific equity index, such as the S&P 500. The minimum guaranteed growth rate associated with these annuities is typically in the range of 3-4%. This means that regardless of how poorly the underlying index performs, the policyholder is assured a minimum interest crediting rate on their investment.

This minimum guarantee serves as a safety net for investors, ensuring that they do not lose money in a down market, while still having the potential to earn higher returns linked to the equity market's performance. It's designed to offer a balance between risk and reward, appealing to those who want exposure to stock market growth while having some level of protection.

Understanding this aspect is crucial for individuals looking into EIAs, as it highlights the conservative nature of this financial product while still allowing for growth opportunities.