February 18, 2026

Crypto meets annuities: what to know about bitcoin-linked FIAs

As of late, fixed index annuities have expanded, offering indices that go beyond stocks and bonds. Bitcoin-linked FIAs are one example of this trend.

By adding an element of Bitcoin exposure, insurance companies are providing clients with access to newer asset classes while still offering the protections and guarantees of fixed annuities.

It’s important to note that we’re not referring to “bitcoin inside annuities,” as many clients and some advisors may assume.

“Instead, the annuity monitors Bitcoin through an ETF and uses index rules to keep risk within a target range,” said Harold Zazula, certified financial planner and retired income certified professional.

Growth and guarantees unite

Bitcoin-linked FIAs fuse two opposing strategies: the guarantees of annuities and the drastic upside potential sought after by crypto investors.

For some advisors and clients, this may not make sense, especially at first glance.

“I’ve collaborated with several advisors who routinely dismissed bitcoin-linked products for conservative clients. However, once they understood that the BlackRock U.S. Equity Bitcoin Balanced Risk 12% Index product, for example, secures principal retention while offering upside exposure with a cap, their views began to change,” explained Cody Schuiteboer, president and CEO of Best Interest Financial.

One advisor noted the value of this strategy, as it allowed a 58-year-old client who was apprehensive about missing out on Bitcoin to feel at ease. At the same time, the investment had the potential to appreciate. From a diversification standpoint, the client benefited from the 12% bitcoin exposure in a balanced framework.

Limitations of these types of products

While bitcoin-based annuities do have their benefits, they also come with real trade-offs that both advisors and clients can’t ignore.

The most significant ones include upside caps and early withdrawal penalties.

“For example, let’s say an annuity is capped at 12% of the upside. If Bitcoin doubles in a year, the policyholder can capture 12% of that gain, at the most. The annuity may also have surrender periods, measured in years, during which early withdrawal penalties can be extraordinarily punitive,” Schuiteboer said.

Additionally, the annuity’s security depends on the financial stability of the insurance company issuing it.

Lastly, the complexity of bitcoin creates a liability risk for advisors, especially if there isn’t sufficient documentation that shows a client understands the ins and outs of these types of unique products.

How to help clients navigate

Should annuity advisors sell bitcoin-linked annuities to their clients? “The simple answer is yes, but with lots of caveats,” Schuiteboer said.

As an advisor, it might make sense to recommend these products in two situations: when a client has shown interest in cryptocurrencies or has the desire to experiment with digital assets.

To assist clients in assessing the potential value of Bitcoin annuities, begin by capturing their individual Bitcoin value hypotheses and risk tolerances.

“You could ask a client whether they would be comfortable with Bitcoin falling 40% in a given year, and whether the capped upside in a product of this nature would be sufficient to meet their growth expectations,” Schuiteboer said.

For some clients, a 12% Bitcoin exposure allocation may feel insufficient if they strongly desire cryptocurrency exposure, and for others, it may feel like the ideal balance.

Regardless of whether you promote bitcoin-linked annuities to clients or not, it’s your obligation to educate yourself on these products. The industry can no longer afford to dismiss bitcoin annuities as products of passing trends, given that they address legitimate consumer demand.

“Simultaneously, you must uphold the highest ethical standards and only recommend these products when they actually meet the client’s stated objectives,” added Schuiteboer.

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