How do Insurance Carriers Use Options to Price Fixed Indexed Annuities

Here at Annuity Think Tank, we are continually asked how the insurance carriers use options and derivatives to price these fixed indexed annuities.  What we have also found is that the majority of consumers (and even many financial advisors) believe that the carriers just invest all of the premium into the indexes and keep any spread above the caps.  In reality, that couldn’t be further from the truth.

Watch this great video that explains exactly how the carriers use options and make money.

 

 

Option Pricing For Insurance Carriers – Video

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Tags: fixed indexed annuity options, how do carriers price indexed annuities, How do Insurance Carriers Use Options to Price Fixed Indexed Annuities, indexed annuity option pricing, pricing variable annuities with options, using options to price annuities

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