No one knows for certain how equity index annuities will perform in a bad bear market, but EIAs have a much better record than bank certificates of deposit over the past 5 years.[@@]

Researchers at Advantage Compendium Ltd., St. Louis, have published that conclusion in a report on an informal review of data from actual EIA customer statements.

The researchers found that the value of assets in the sample EIAs has increased an average of 24% over the past 5 years, compared with an average total increase of just 14% for the value of assets held in bank certificates of deposit, the researchers conclude.

Issuers of EIAs quick to note that direct comparisons are somewhat difficult to make because EIA contracts are backed by the credit of private insurers and not by a federal agency.

Deposits of up to $100,000 in bank CDs are guaranteed by the Federal Deposit Insurance Corp. Traditionally, investment advisors have operated under the assumption that the FDIC, a federal agency, is unlikely to default on its obligations to bank CD holders.