You want your money to grow.
You also want to sleep at night when the market drops.
For years, financial products made you choose one or the other. Growth meant risk. Safety meant giving up most of the upside. A growing share of retirement savers are refusing that trade-off, and the sales numbers show exactly where they are putting their money instead.
The Data Behind the Shift Toward Market-Linked Retirement Strategies
The retirement product world is quietly reorganizing itself around one idea: participate in market gains without absorbing market losses.
Market-linked life insurance designs, structured under Internal Revenue Code Section 7702 (the same section of the tax code that gives 7702 accounts their name, the same way the 401(k) is named for its own section of the tax code), now account for roughly 25% of all new life insurance premium sold in the United States. Add other market-linked life insurance and annuity designs together, and the category has grown to a 35% share of new premium, up from 30% just five years ago.
Annuities, which are contracts with an insurance company that can provide guaranteed income you cannot outlive, told the same story on an even larger scale. Total annuity sales eclipsed $120 billion in a single quarter (the third quarter of 2025) alone. Within that number, registered index-linked annuities, a newer category that ties returns to a market index while limiting losses, hit a record $20.7 billion.
The through-line across every one of these numbers is the same. Savers no longer accept an all-or-nothing choice between growth and protection. They want both, and the financial industry has spent the last five years building the tools to give it to them.
How a Floor-With-Upside Strategy Actually Works
Here is the mechanism behind a market-linked account, in plain terms.
Rather than investing your money directly in the stock market, where you own shares and can lose value dollar for dollar in a downturn, a market-linked account credits interest based on the performance of a market index, such as the S&P 500 (a widely followed measure of 500 of the largest publicly traded U.S. companies). You do not own the index itself. You are credited a return tied to how it performs, subject to a few guardrails.
The floor. Most market-linked designs set a floor of 0%. If the index the account is tied to loses value in a given period, your account does not lose value with it. You do not participate in the downside.
The cap or participation rate. In exchange for that floor, the account limits how much of the index's gain you receive. A cap rate sets a maximum credited return for the period (for example, an 8% cap means you are credited up to 8% even if the index gained more). A participation rate sets what percentage of the index's gain you receive (for example, a 70% participation rate on a 10% index gain credits you 7%).
The trigger rate. Some designs use a trigger rate instead of a cap or participation rate. If the index gain is positive at all, even by a fraction of a percent, you are credited a flat stated return regardless of how high the index actually climbed.
None of this is magic, and none of it guarantees you will match the stock market in a strong year. What it guarantees is a floor. Your account cannot go backward because of market performance. That single feature is why $120 billion moved into annuities in three months, and why market-linked life insurance designs have grown their share of new premium every year for five years running.
Why This Matters More Right Now
Two forces are converging to push more retirement savers toward protected, market-linked accounts.
Sequence of returns risk. A market downturn that hits in the years right before or right after you retire does far more damage than the same downturn hitting during your peak earning years, because you are drawing income out of a shrinking account instead of adding to a growing one. A floor-with-upside account removes that specific risk from the portion of savings placed inside it.
Higher interest rate environments improve the trade. Insurance companies fund the floor and the growth potential of these accounts partly through the interest they earn on bonds and other fixed-income holdings. When interest rates are higher, insurers can generally offer more generous cap rates and participation rates to policyholders, which is part of why cap rates on many contracts have improved in recent years.
Put those two forces together and it is not surprising that savers who are close to retirement, and savers who simply remember what 2022 or 2008 felt like, are moving toward accounts built with a hard floor underneath them.
Strategy First, Product Second: Matching the Vehicle to Your Time Horizon
At King Legacy Group, we start every conversation with strategy, not product. The strategy here is straightforward: protect principal from loss while keeping a share of market growth. The product used to execute that strategy changes depending on where you are in your financial life, specifically your time horizon and your income needs.
For clients who are retirement-ready, meaning they are within a few years of retirement or already retired, a Fixed Index Annuity is often the more fitting vehicle. A Fixed Index Annuity, again a contract with an insurance company, is built specifically to convert a lump sum of savings into protected accumulation now and a stream of guaranteed lifetime income later. It answers a retirement-ready client's two biggest questions at once: will my principal be protected from a downturn, and will I run out of money.
For younger clients with a longer runway, meaning they are still a decade or more from needing the income, a max-funded 7702 account is often the more fitting vehicle. A 7702 account is a life insurance contract, funded well above the minimum required premium, that is structured to build tax-free accumulation you can access later through policy loans, plus a death benefit that protects your family in the meantime. Younger clients benefit from the account's longer growth runway and gain a feature a Fixed Index Annuity does not offer on its own: a death benefit.
Same underlying strategy, floor-with-upside participation in the market, applied through two different vehicles, chosen because of where each client sits on the timeline. That is the difference between shopping for a product and building a strategy.
An Illustrative Example
The following is a fictional, composite scenario for educational purposes only. It does not represent any actual client or client result.
Consider a hypothetical couple. Robert, 62, plans to retire in three years. His wife Diane, 54, plans to keep working for roughly another decade. Both are still frustrated by a stretch a few years back when their retirement accounts lost double-digit value in a single year, then took years to recover.
For Robert, whose time horizon is short and whose priority is protecting what he has already built while generating future income, the recommendation centers on a Fixed Index Annuity. A portion of his retirement savings moves into the annuity, where it is protected from loss and begins earning market-linked interest immediately, with the option to convert to guaranteed lifetime income when he is ready to retire.
For Diane, whose time horizon is a full decade longer and who also wants a death benefit protecting her family, the recommendation centers on a max-funded 7702 account. Her longer runway means more years of market-linked growth before she needs to access the funds, and the account adds a death benefit that a Fixed Index Annuity does not provide.
Same underlying concern, protect from loss while participating in growth, addressed through two different products, matched to two different timelines within the same household.
Frequently Asked Questions
What are market-linked retirement products that let me participate in gains but protect against losses?
Market-linked retirement products, such as a Fixed Index Annuity or a 7702 account, credit interest based on the performance of a market index while including a floor, often 0%, that prevents your account from losing value when the index declines. You receive a share of the index's gain, limited by a cap or participation rate, without the risk of losing principal to a market downturn.
Is a Fixed Index Annuity the same as investing in the stock market?
No. With a Fixed Index Annuity, you do not own shares of the index or any stocks. Your account is credited an interest rate based on the index's performance, subject to a floor and a cap or participation rate. You cannot lose principal due to market performance, but your upside in a strong market year is also limited compared to owning the index directly.
What is a 7702 account and how is it different from a 401(k)?
A 7702 account is a life insurance contract, named for the section of the Internal Revenue Code that governs it, that can be funded well above the minimum premium to build tax-free accumulation you access later through policy loans. Unlike a 401(k), which is a workplace retirement account funded with pre-tax or after-tax dollars and taxed on withdrawal, a properly structured 7702 account grows tax-deferred and can be accessed tax-free through policy loans, and it includes a death benefit for your family.
Who is a good candidate for a market-linked strategy?
Anyone who wants to participate in market growth without accepting full market risk is a candidate, but the right product depends heavily on time horizon. Retirement-ready clients closer to needing income typically lean toward a Fixed Index Annuity for its guaranteed lifetime income option. Younger clients with a longer runway typically lean toward a max-funded 7702 account for its combination of tax-free growth potential and a death benefit.
Do I give up all of the market's upside with a market-linked strategy?
You give up some of the upside, not all of it. A cap rate or participation rate limits how much of an index's gain is credited to your account in exchange for the floor that protects you from loss. The tradeoff is intentional: less ceiling in exchange for a hard floor underneath you.
Your Next Step
You should not have to choose between growing your money and protecting it. Market-linked strategies exist precisely so you do not have to. King Legacy Group matches the right protected-growth vehicle, a Fixed Index Annuity or a 7702 account, to where you actually are on your financial timeline.
Ready to see which market-linked strategy fits your timeline? Schedule your strategy review here.
Complimentary. No pressure. A clear path to your LivingLEGACY™.
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