For the past couple of years, MYGAs have dominated conversations. And it’s easy to see why—clean, simple, and easy to present: “Here’s the rate, here’s the term.” But if you’re only chasing the top spreadsheet number, you’re leaving an entire strategy behind.
Fixed Index Annuities (FIAs) still carry the advantage of growth potential above fixed rates. More importantly, many come with built-in safety nets that make them easier to present to clients who may be nervous about indexing. Think of these as “golden parachutes”—extra protections that can give clients confidence while keeping you in the FIA game.
Let’s look at a few examples:
Definition: A bailout cap allows clients to walk away penalty-free if renewal caps fall below a certain level.
How it works: If the annuity promises a bailout at 3%, and renewal caps ever reset below that, the client can exit without surrender charges.
Positioning tip: This feature takes the fear out of “what if they lower my caps?” It’s like a guarantee that the deal won’t get worse than what the client expected.
Definition: Guarantees clients can get back their original premium (minus withdrawals) if they need to surrender.
How it works: Even if the FIA underperforms or the client wants out early, they can recoup their money without penalties.
Positioning tip: This isn’t an “exit strategy”—it’s a safety net. Clients can say yes to indexing without worrying they’ll be stuck if circumstances change.
Definition: Extra withdrawal privileges beyond the standard 10%.
How it works: Some contracts let clients withdraw more than 10% per year, or “bank” unused withdrawals so they accrue year after year. For example, skip a withdrawal one year, and the next year they can access 20%.
Positioning tip: Liquidity matters, especially for clients who fear tying up too much money. This feature makes indexing more flexible and easier to commit to.
Definition: Crediting caps or participation rates that are locked in for the life of the contract, not just one year.
How it works: Instead of renewal rate risk, the client knows their chosen index strategy will never dip below the original rate.
Positioning tip: This creates renewal integrity—a huge objection-killer. Clients don’t have to worry about the “bait and switch” feeling.
Enhanced Free Withdrawal at Nursing Home/Terminal Illness – extra access during emergencies.
Partial Index Bonuses – upfront or recurring credits that boost returns.
No-fee Strategies – growth options without budget drag.
If your FIA can’t outperform today’s best MYGA rates, don’t even bother putting it on the table. Clients don’t need indexing with training wheels that still rides slower than a basic fixed rate. That’s why we put together the Growth Test in a previous post—run your FIA through it first. If it passes, then look for the parachutes that make it even easier to sell.
When presenting an FIA, frame it this way:
👉 “We’re not just looking for growth. We’re looking for growth with safety nets. These extra features give you more control and more ways out if things don’t go as planned. Think of it as your golden parachute—added protection built into the contract.”
This reframes the FIA from a “maybe higher return than a MYGA” to a structured solution with built-in flexibility and guardrails.
✅ Takeaway for Advisors:
Instead of defaulting to the top MYGA rate, look for FIAs that offer indexing potential PLUS safety features. These “parachute” benefits make the conversation easier, reduce client hesitation, and open doors to more meaningful long-term planning.