Why “Indexed” Strategies (FIAs & IULs) often beat staying 100 % in the market
Since 2000 the S&P 500® has delivered spectacular rallies—and three gut-wrenching crashes. Each loss dug a hole that required even bigger gains just to break even. A new generation of indexed strategies—Fixed Indexed Annuities (FIAs) and Indexed Universal Life (IUL) with a 0 % floor, 100 % participation, and no caps—solves that problem by turning every negative year into flat while still crediting the full upside in positive years.
How a 0 % Floor + 100 % Participation Works
0 % Floor – In any year the index finishes negative, your contract simply credits 0 %. You never lose principal or previous gains (“Zero is your hero”). kiplinger.com
100 % Participation – In up years you receive the entire index gain—no caps to clip performance.
Annual Reset – The next crediting period starts from your new, higher protected value, so each bull-market run builds on a higher base.
24-Year Case Study (2000-2023)
Why Protection + Full Upside Wins
1. Avoid the Hole, Keep the Hill
Locking in 0 % instead of –20 % eliminates the enormous “catch-up” math.
2. Faster Compounding
Because you never claw back losses, every future gain compounds on a permanently higher base.
3. Behavior Advantage
Clients sleep at night and resist panic selling; demand for FIAs hit a record $79 B in 2022 as markets fell. investopedia.comlimra.com
4. State-Regulated Safety
Contracts are backed by insurance carriers and overseen by state regulators; agents must hold life/health (and often securities) licenses.
Who Should Consider an Uncapped FIA or IUL?
Pre-retirees worried about a late-career crash
Retirees facing sequence-of-return risk
Savers who want tax-advantaged growth (IUL) without market volatility
Anyone who values principal protection and uncapped upside
FAQs
Does the 0 % floor cost me anything?
No direct fee—insurers price the guarantee by using option strategies; your rate is declared in advance.
Do I lose dividends?
Yes. Credits track price-only moves, but the 0 % floor + tax advantages (and no drag from losses) historically offset the absence of dividends.
Can I get out early?
FIAs have surrender schedules (typically 7–10 yrs). Many IULs allow policy loans or withdrawals tax-free, if structured correctly.
Take the Next Step
Curious how a 0 %-floor, 100 %-participation strategy fits your plan? Schedule a complimentary call and we’ll run the numbers on your timeline, tax bracket, and legacy goals—no pressure, just clarity.
Sources
S&P 500® annual total-return table (1927-2023), Macrotrends Source: macrotrends.net
“With Fixed Indexed Annuities, Zero Is Your Hero,” Kiplinger Source: kiplinger.com
“Annuity Sales Hit a Record in 2022 as Investors Sought Security,” Investopedia Source: investopedia.com
LIMRA U.S. Retail Annuity Sales Survey, 2022 Source: limra.com
(Figures are hypothetical and for illustrative purposes only. Actual contract terms and results vary by carrier and index option. Guarantees rely on the claims-paying ability of the issuing insurer.)
