Football Annuities

Football Annuities

August 25, 2018 – With college football upon us and the NFL’s 2018 season right around the corner, this is the perfect time to discuss fixed indexed annuities.


OK, so maybe I’m stretching a bit but as this year’s first kick-off approaches, it occurs to me there’s a perfect parallel between something that happens on the gridiron and the popular retirement income option that people spent $32.1 billion on so far in 2018 alone.

Here’s hoping my analogy helps the unconvinced better appreciate the value of indexed annuities.

First: What Is a Fixed Indexed Annuity?

An oversimplified explanation goes something like this:

A fixed indexed annuity (FIA) is an insurance product whereby an individual trades a lump sum of money today (or periodic deposits over time) in exchange for the promise of tax-deferred, guaranteed lifetime income, certain income, or a lump sum at some point in the future.

The money earns interest credits based on the direction of one or more indexes selected (S&P 500 is a common one) from a variety of strategies available depending on the risk tolerance of the individual.

The design of the FIA is such that if the market index increases, so does your account balance up to the maximum permitted by the contract.

The trade-off for having a cap on your upside potential is the floor which prevents your account from ever losing money.

The Indexed Annuity Leadership Council offers a Fixed Indexed Annuities 101 primer we recommend and think you’ll find helpful. (Be sure to watch the three-minute cartoon at the bottom of the page!)

Recapping: Put money in, never lose it, get tax-deferred, market-based growth followed by guaranteed income for life.

What’s not to like about that?

Got it. What’s This Got to Do with Football?

When football teams are winning late in the game, many defensive coordinators will go into the dreaded “prevent defense” to keep the other team from scoring a touchdown. The idea is that it’s better to let the other team gain a few yards slowly while the clock runs down than to give up a big play resulting in a touchdown. And a loss.

Theoretically, prevent defenses work great. But as any football fan can tell you, things don’t always work out the way it’s drawn up. Despite best defensive efforts, the losing team can mount a come-from-behind victory and the team that was supposed to win finds itself putting up an L in the record books.

What if the defensive coordinator could, instead, implement a “fixed indexed annuity defense” GUARANTEEING the other team couldn’t score?

A fixed indexed annuity is like a prevent defense with a 100-foot concrete wall across the end zone.

FIAs make it impossible for the market to defeat you once you’ve scored your points. Since your balance never decreases, you can never lose money once you roll funds into a FIA assuring you a retirement victory.

So just like a concrete wall can prevent a touchdown and a seal a victory for the wining team, a FIA can prevent you from losing the money you worked hard to accumulate and can make sure you end up on the winning side of your retirement dreams.

Football image courtesy of vectorolie at


Finn Financial Group