Your Savings Deserve More Than a CD Rate — Without the Market Risk

If you have money sitting in a bank account or CD and you're not sure it will last through retirement, a fixed indexed annuity may be worth a serious look. At JEMS of Insurance Group, we help families across Chicagoland understand how annuities work, compare their options, and choose a product that fits their actual situation — in English or Spanish, in person if needed.

Request a Free Consultation

What Is a Fixed Indexed Annuity — and How Does It Work?

A fixed indexed annuity (FIA) is an insurance product that ties interest crediting to the performance of a market index — typically the S&P 500 — while contractually protecting your principal from market losses. It is not a securities product. JEMS agents are licensed to sell and explain them, and every recommendation we make is governed by Illinois suitability requirements, meaning we are legally required to recommend only products appropriate for your financial situation.

 

Here is how the core mechanics work:

 

  • Principal protection: Your account value cannot decrease due to index losses. If the market drops, you do not lose what you put in.
  • Participation rate and interest crediting: When the index performs positively, your account earns a portion of that gain, up to a cap or based on a participation rate set in the contract.
  • The floor: The contractual minimum annual return is 0%. In a down market year, the worst outcome is zero growth — not a loss.
  • Surrender period: FIAs are designed as long-term vehicles. Most contracts include a surrender period of 5 to 10 years during which early withdrawals beyond the free withdrawal amount may carry a charge.
  • Free withdrawal provisions: Most contracts allow you to withdraw up to 10% of your account value per year without a surrender charge. This is written into the contract.
  • Income riders: Optional riders can be added to guarantee a monthly or annual withdrawal amount — regardless of account value — starting immediately or at a future date you choose.
Doctor reviewing a tablet with two smiling patients in a bright clinic

How a Fixed Indexed Annuity Compares to a CD or Savings Account

One of the most common questions we hear is: "Why wouldn't I just leave my money in the bank?" It is a fair question, and the answer comes down to three factors: growth potential, income certainty, and what happens when the market moves.

Growth Potential

A traditional savings account or CD offers a fixed, often modest interest rate set by the bank. A fixed indexed annuity offers the potential for higher interest crediting when the market index performs well — while still protecting your principal when it does not. For clients in or near retirement, that difference in long-term accumulation can be meaningful.

Principal Protection

Both CDs and fixed indexed annuities protect your principal — but in different ways. A CD is FDIC-insured up to $250,000 per depositor. A fixed indexed annuity is backed by the financial strength of the issuing insurance carrier and regulated by the Illinois Department of Insurance. Neither exposes your principal to direct market loss.

Income Certainty

A CD matures and returns your principal plus interest. A savings account has no income structure at all. A fixed indexed annuity with an income rider can generate a guaranteed withdrawal amount for life — or for a set number of years — regardless of what the market does after you start drawing. For clients who need their savings to function as a paycheck in retirement, that structure is something a CD simply cannot provide.

Liquidity and Access

The idea that annuities lock your money away permanently is a common misconception. Most fixed indexed annuities include free withdrawal provisions — typically 10% of the account value per year — available without surrender charges. Income riders can also be structured to begin distributions on a schedule that fits your needs. Your money is not inaccessible; the terms of access are just defined in the contract rather than left open-ended.

Who We Work With — and How We Recommend Annuity Products in Illinois

Illinois requires that insurance agents recommending annuity products follow a suitability standard. Before we recommend any product, we review your current financial picture: your income sources, existing savings, monthly expenses, health considerations, and how long you want your money to last. A fixed indexed annuity is not right for everyone, and we will tell you that directly if it is not the right fit. Our job is to give you an honest picture — not to sell you a product that does not serve you.

 

We work with clients across the Chicagoland area, including North Riverside, Cicero, Berwyn, Waukegan, Elgin, Aurora, and the Chicago South Side. Consultations are available by appointment at our North Riverside office or by phone.

Common Questions About Annuities in Illinois

  • What is a fixed indexed annuity in Illinois?

    A fixed indexed annuity is an insurance contract that credits interest based on the performance of a market index, such as the S&P 500, while protecting your principal from market losses. It is regulated by the Illinois Department of Insurance and sold by licensed insurance agents — not securities brokers.

  • Can I lose money in a fixed indexed annuity if the market drops?

    No. The contractual floor on a fixed indexed annuity is 0%. If the index your contract is tied to has a negative year, your account value does not decrease due to that loss. You may earn no interest that year, but you do not lose principal because of market performance.

  • How is an annuity different from a CD for retirement income?

    A CD pays a fixed rate and returns your principal at maturity, but it does not provide ongoing income. A fixed indexed annuity can include an income rider that pays a guaranteed withdrawal amount for life or a defined period, making it a more structured tool for retirement income planning.

  • Are annuities locked up and inaccessible once I buy one?

    Not entirely. Most fixed indexed annuities include a free withdrawal provision — typically 10% of the account value per year — that you can access without a surrender charge. Income riders can also be structured to begin payments on a schedule you choose. Surrender charges apply to amounts above the free withdrawal threshold during the surrender period, which is disclosed clearly in the contract.

  • Does JEMS of Insurance Group offer annuity consultations in Spanish?

    Yes. More than 90% of our clients are served in Spanish, and our team is fully equipped to explain annuity products, compare options, and walk through contract terms in Spanish. We serve families across Chicagoland and offer in-person appointments at our North Riverside office.

Ready to See Whether an Annuity Makes Sense for Your Retirement?

We will walk you through how fixed indexed annuities work, compare them against what you currently have, and give you an honest answer about whether they belong in your retirement plan. There is no pressure and no obligation — just a clear conversation about your options. Call us or request a free consultation to get started.