Fixed Indexed Annuities

Fixed Indexed Annuities

Enjoy principal protection with the potential for growth, and if needed, income for life.

What is a fixed indexed annuity?

If you're looking for principal protection with the potential to earn an attractive rate of return that is tied to the market, without being directly invested, a fixed indexed annuity may be a fit for you. A fixed indexed annuity is a long-term investment that allows your assets to grow tax-deferred, and for an additional cost, offers an optional guaranteed lifetime withdrawal benefit (GLWB) that provides a guaranteed "retirement paycheck" for you and your spouse that is guaranteed to grow each year income is deferred (up to 10 years). The guaranteed income (your "retirement paycheck") is designed to help cover your essential living expenses, as defined by you, in retirement.

Guarantees are backed by the claims paying ability and financial strength of the issuing insurance company, not Schwab.

Click here for interest rates on the fixed indexed annuity offered through Schwab.

Questions about annuities? Contact an annuity specialist at 866-663-5241.

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Issuer Protective Life Insurance Company
Financial strength—Standard & Poor’s1 AA-
Maximum issue age 85
Maximum purchase
Additional purchase
Additional purchase payments are welcome when initiated before the first contract anniversary and received before the oldest owner or annuitant turns 86. The minimum additional purchase payment amount is $1000.

See more fixed indexed annuity product information.

Five or seven years. After the initial guaranteed period expires, renewal interest rates and caps will be declared on each contract anniversary. The renewal rates and caps will never be less than the minimums stated in the contract.

5- and 7-year withdrawal

  • Year 1
    Charge: 9%
  • Year 2
    Charge: 9%
  • Year 3
    Charge: 8%
  • Year 4
    Charge: 7%
  • Year 5
    Charge: 6%
  • Year 6
    Charge: 5%
  • Year 7
    Charge: 4%

In California, the 5-year withdrawal charge schedule is 9%, 8%, 7%, 6%, 5%. The 7-year withdrawal charge schedule is 9%, 8%, 7%, 6%, 5%, 4%, 3%. The withdrawal charge period will always equal the initial interest rate guarantee period. For example, the 5-year initial interest rate guarantee period will have a 5-year withdrawal charge period and the 7-year initial interest rate guarantee period will have a 7-year withdrawal charge period.

The initial interest rates and caps will depend on the initial guaranteed period chosen and the total of all purchase payments received (minus withdrawals and applicable withdrawal charges) in the first year. 

  • $100,000 and more

Indexed-Linked Option (at issue)3

S&P 500® Index

Annual Rate Cap for Term

Every year, after the completion of the withdrawal charge period, you will have the option to renew into the annual point-to-point strategy or fixed account. Other options may also be available; please contact the service center for details.

A minimum surrender value is guaranteed when the contract is terminated due to full surrender, death, or annuitization. This amount is calculated by:

  • Taking 100% of aggregate purchase payments accumulated at the contract’s non-forfeiture rate, which cannot be less than 1% or more than 3%, and
  • Subtracting any prior aggregate withdrawals (including withdrawal charges) accumulated at the non-forfeiture rate, and
  • Subtracting any withdrawal charges that apply at termination.



You can withdraw 10% of your initial purchase payment during the first contract year with no withdrawal charge or market value adjustment. After that, you can withdraw 10% of the contract value annually on each withdrawal date, minus any free withdrawal already taken since the prior contract anniversary. 


Because any interest earned from the performance of the indexed strategy is not credited until the last day of the contract year, any withdrawals from the indexed interest crediting strategy (regardless of whether they are subject to withdrawal charges) do not earn interest for the contract year in which the withdrawals are taken. 


All withdrawals reduce the annuity's remaining death benefit, contract value, cash surrender value, future earnings, and lifetime payment amount. More frequent withdrawals may reduce earnings more than annual withdrawals.


Withdrawals may be subject to income tax and, if taken prior to age 59½, an additional 10% IRS tax penalty may apply.


In addition to withdrawal charges, a market value adjustment (MVA) is applied to withdrawals that exceed the allowable penalty-free amount. The MVA can either increase, decrease, or have no effect on your requested withdrawal amount. The MVA does not impact your minimum surrender value, and will not apply once the withdrawal charge period has expired. If you surrender your contract, you will receive the greater of the surrender value or the minimum surrender value.4,5,6

Should you pass away before starting your annuity income payments, as of the date Protective Life receives the proof of death, your beneficiaries will receive the contract value or the minimum surrender value.

Protective Indexed Annuity II offers an optional protected lifetime income benefit, SecurePay SE, that's designed to help you create a solid retirement income plan. For an additional cost, it offers:

  • Guaranteed annual benefit base growth, with a 7% simple interest roll-up for up to 10 contract years
  • Opportunities to enhance income with interest crediting strategy gains
  • Lifetime retirement income with guaranteed annual withdrawals, available on a single or joint life basis

The cost is calculated as a percentage of your benefit base and deducted form your contract value quarterly.

What other factors should you be aware of when considering a fixed indexed annuity?

A fixed indexed annuity may have withdrawal or surrender charges (a charge on an early withdrawal based on the guaranteed period of the policy or cancellation of the policy), and some contracts may impose a market value adjustment if you make a withdrawal during one or more of the guaranteed periods offered under the policy. Generally, any withdrawals in a given year during the initial guaranteed period that exceed 10% of your account value will be subject to withdrawal charges and/or a market value adjustment.

Withdrawals from a fixed indexed annuity will reduce the value of your annuity and can be subject to ordinary income tax. Withdrawals prior to age 59½ may also be subject to a 10% federal tax penalty.

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