What Wall Street Does Not Want You To Know
First, if you’re not familiar with insurance indexing. Insurance indexing is a strategy that links the interest credited in a financial account or insurance contract to an index, like the S&P 500®.
Typically, indexed products work like this: there is a floor of zero, meaning the worst you can do in a given measurement period is 0% interest. (In 2008, when the market dropped 37%, indexed accounts were not credited any interest, but unlike funds in the stock market, they didn’t lose any value, either.)
At our firm, we love using indexed insurance contracts, because they protect our clients from market crashes while still letting them participate in market rises.
I also wondered: how would the Index Contract do in the worst market our country has faced in modern history: The Great Depression?
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