Midland National A Sammons Financial Company

Issued by Midland National® Life Insurance Company

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How FIAs are equipped to face a bear market

June 14, 2023, 3:50:55 PM | Reading Time: 5 minutes

You may hear the terms “bear market” or “bull market” used to describe the current economy and stock market performance. Both are standard parts of the market cycle but involve very different behaviors. A bull market means a rising market, commonly a 20% rise or more in stock prices over at least two months. A bear market is the opposite, where we see a 20% or more drop in a primary stock market index over a period of time. Occurring approximately every 5.5 years, a bear market has an average decline of 34.5%. This environment can be worrisome for investors, especially retirees concerned about their retirement savings losing value.

Fixed index annuities and bear markets

Thankfully, there are financial products that are made to hold up in a bear market and protect your hard-earned savings, even if the market has a downturn. One of these solutions is a fixed index annuity (FIA), which offers upside potential with downside protection.

Benefits of fixed index annuities in a bear market

In the middle of a bear market, you ideally want stability, safety, and potential growth opportunities. A fixed index annuity is designed to balance growth potential and protection of your retirement assets.


Key  Safety

Instead of getting knocked off track when the market performs negatively, having an FIA as part of your financial plan allows you to protect a portion of your retirement savings when a bear market arises. Since interest credits are linked to market performance and not directly invested in the market, an FIA will not lose value during a market decline. Plus, if you’ve already begun receiving income payments from your annuity, that money is protected and will continue as scheduled, even during a bear market.

FIAs and low risk Low risk

Fixed index annuities are in the lower range on the risk spectrum and “lock in” interest credits, so any interest credits cannot be lost during market downturns, and your premium is protected from market downturns. Take a look at where FIAs compare with other products in light of risk.


FIA risk spectrum

Fixed index annuities growthGrowth

FIAs can help you start or continue building your retirement savings as part of your overall retirement accumulation strategy. While some stocks and other investments decline due to market volatility, fixed index annuities can help create a foundation of conservative tax-deferred growth. Even if the market declines, your interest rate is guaranteed never to be less than zero.

Fixed index annuity flexibility Flexibility

Depending on your contract, you may be able to start receiving annuity payments within a year of purchasing an FIA, or you can defer the payments to a later date. Several FIAs also offer an annual penalty-free withdrawal amount, typically a percentage of your accumulation value, that you can take out without a surrender charge. Additional liquidity options can be available, like withdrawing funds to help cover the cost of an extended nursing home stay.

Fixed index annuities guaranteed incomeGuaranteed income

Certain FIAs have built-in or optional income riders that allow you to turn your retirement savings into guaranteed retirement income. A bear market will not disrupt these payments or cause their value to drop.

Talk to a financial professional about bear market moves

Any time the market declines, or we’re in a lasting bear market, it’s important not to panic. Remember that fluctuations are expected, and the stock market will recover. Talking to your financial professional can help put things in perspective and offer reassurance about your financial plan. If you want to protect your assets against market uncertainties, consider discussing fixed index annuities and how these products can help you plan your financial future more confidently.


Fixed index annuities are not a direct investment in the stock market. They are long-term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices without the risk of loss of premium due to market downturns or fluctuation. Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from your accumulation value for additional optional benefit riders could, under certain scenarios, exceed interest credited to the accumulation value, which would result in a loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.

A surrender during the surrender charge period could result in a loss of premium. Surrender charge structure may vary by state.

This information is provided for general reference purposes and should not be viewed as investment advice or as a recommendation for a specific allocation. Neither Midland National nor any agents acting on its behalf should be viewed as providing legal, tax, or investment advice. Clients should always consult with and rely on their qualified advisors. The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.



Not FDIC/NCUA Insured Not A Deposit Of A Bank Not Bank Guaranteed
May Lose Value Not Insured By Any Federal Government Agency

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