Fixed index annuity is an equity-indexed annuity that earns interest or provides benefits that are linked to an external equity reference or an equity index. The value of the index might be tied to a stock or other equity index. One of the most commonly used indices is Standard & Poor’s 500 Composite Stock Price Index (the S&P 500), which is an equity index. The value of any index varies from day to day and is not predictable. When you buy an equity-indexed annuity you own an insurance contract. You are not buying shares of any stock or index.
Source: National Association of Insurance Commissioners