Market linking accounts come in four general product types: Market Lined CDs, Indexed Annuities, Indexed Life Insurance and Structured Notes. Market link accounts issued by an insurance carrier are generally called ‘indexed’ products. We categorize both market linked CDs and indexed products as institutional market linked accounts, because the principal is guaranteed by a major financial institution.
Structured notes are market linked accounts issued by a non-institutional entity. This might be a brokerage house, or an asset management company or a private individual. Structured notes can a wide variety of forms. Because structure notes generally do not come with an institutional guarantee of the principals, they are not covered on this site. Our only guidance on structured notes is to be careful and make sure you understand exactly what you are buying.
The table below compares the various features of institutionally issued market linked account. Our hope is that this information will guide you to the most appropriate choice for your situation. For a more detailed discussion, please see ??????Link???
|Structured CD||Indexed Annuity||Indexed Life Insurance|
|Issued by||Bank||Insurance Co.||Insurance Co.|
|Protection from Market Loss|
|Time Horizon||Short-Intermediate||Long term||Lifetime|
|Financial Purpose||Accumulation||Retirement||Wealth Transfer|
|Retirement Income Guarantees||No|
|Tax Free Accumulations||No|
|Historical Yield Higher than the following:||Bank CDs – Tbills||Commercial Bonds||Commercial Bonds|
|High Risk Adjusted Return|
|Tax Favored Distributions||No|
|Account Balloons at Death||No||No|
|Tax on Death Transfer||No||No|
|Optional Long Term Care Protection||No|
|Product Availability on:||Trading Date||Anytime||Anytime|
|Requirements||None||Suitability Forms||Medical Underwriting|
|Minimum||$25,000||$10,000||$100 per Month|
|Flexible Deposits||Single Pay Only||Yes||Yes|
|Triggers Social Security Tax||Yes||Partial||No|