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Indexed Annuity Linked to Commodities


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Symetra Financial and Legacy Marketing Group are both offering commodities with their indexed annuity products now, according to Insurance News Net’s Linda Koco.  In “Commodities Debut in Indexed Annuities,” we learn about the Symetra Edge Pro, which offers the S&P GSCI commodity index as well as strategies tied to the S&P 500.  You can choose between point-to-point or monthly average crediting strategies.  Twenty-four commodities in many different sectors make up the S&P GSCI, making it a good measure of the world’s economy.  Legacy’s Gold Commodity strategy will be offered in three indexed annuity products this summer.  It credits interest based on the changing price of gold and has already been used in some of Legacy’s indexed annuities issued by Investors Insurance Corp.

One of the driving forces behind these commodities options is producer demand.  Depending on the pricing trends, investors may get a higher interest crediting method with their indexed annuity being tied to a commodities index.  These indices may also perform well when others are not, so they could work well for certain investors and annuities.  Commodities don’t always perform differently than equities, but in the past forty years, commodities have gone up while equities have gone down more than half the time.  Other advantages for linking to commodities include flexibility, diversification, and the protection from market downswings like with other indexed annuity products.  There are currently twelve indices available for commodities linking and you may be able to find fixed accounts as well.

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