No. of Recommendations: 1
RayVT covered the subject pretty well, but these are similar to Indexed Annuities which are discussed on the Annuities discussion board--

Yours emphasized the insurance aspect, but many annuities have a death benefit.

Most insurance products are high cost, but carefully crafted to make them sound attractive.

The 12% cap can be quite a limitation. The stock market often goes in fits and starts. In good years, the cap holds down your gain. The results can be quite a bit less than the S&P 500 over time.

The main advantages of an annuity are that your money grows tax free and your contributions can be much larger than the limits of a Roth or IRA. If after you fund your Roth or IRA and 401k to the max, you will have more to invest, most prefer mutual funds invested in the long term buy and hold style. You pay taxes only when you sell and then at capital gains rates.

But if an annuity still fits your plans, check out the low fee ones offered by Vanguard, Fidelity, TIAA Creft, T Rowe Price and others. In most annuities, surrender fees can make it expensive to move your money if you are dissatisfied with performance. The low fee ones often have low or no surrender fees. Shop around before you decide.
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