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A special class of annuities that yields returns on your contributions based on a specified equity-based index. These annuities can be purchased from an insurance company, and similar to other types of annuities, the terms and conditions associated with payouts will depend on what is stated in the original annuity contract.

Insurance companies commonly offer a provision of a guaranteed minimum return with indexed annuities, so even if the stock index does poorly, the annuitant will have a limited downside conversely an annuitant's yields may be somewhat lower than expected due to the combination of caps on the maximum amount of interest earned and fee-related deductions.

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