Updated September 7, 2023, at 2:59 PM
Ever since the advent of fixed indexed annuities (FIAs), there’s been speculation about whether or not the product category should be a security or a fixed insurance product.
Both sides of the argument have merit.
On one hand, FIA products don’t expose the client to any loss of principal and, therefore, don’t have any classically defined investment risk. As such, they should be classified exclusively as insurance products.