3 Year Periods Now?

Sep 17, 2015

  1. Justin Bilyj
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    Justin Bilyj Guru

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    Was just on a webinar where the latest product will have a 3 year crediting strategy, seriously? Two years for me is not something I trust, let alone 3 years. How did they frame the pitch? They get more money because it's cheaper to offer 3 year crediting strategies (better caps/lower expenses). I had to jump out of the webinar at that point.

    Would any of you offer a 3 year crediting strategy? Man zero interest rates have messed up retirement for people...
     
  2. pfg1
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    Not me................
     
    pfg1, Sep 17, 2015
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  3. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    I am not a huge fan of 3 year strategies. But I have 2 year strategies on the books and they are some of the best performing contracts I have in my book. Remember, the longer the lock-in, the fewer amount of times the carrier has to lower caps or increase the spread. I actually like the 2 year strategies. My only issue with the 3 year is that it is a long time for the client to see 0% as their gains. It is more the mental aspect than the math.
     
    scagnt83, Sep 17, 2015
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  4. Tahoe Ray
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    5 year p2p and even ANICO'S 10 were around a long time before this rate environment.

    We'd all probably prefer a 1yr p2p but what are you giving up for it?

    It's all about the terms...what are they offering for those 3 years (knowing that they can't change for 3 years)? Is it worth it?

    I agree with scagnt83, the hardest part is explaining it to a client.
     
  5. DWPCL
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    DWPCL Super Genius

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    According to Richard Kado who invented the index annuity, 2 year ptp outperforms 1 year ptp 69% of the time over a 2 year period. 92% of the time over a 12 year period.

    He also went over the stats for 3 year ptp and they were a little better than the 2 year ptp.
     
    DWPCL, Sep 17, 2015
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  6. SanDiego619
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    Clearly a Nationwide webinar. Client does have the optional lock in and 3 year point to point means nothing for the income rider or death benefit rider
     
  7. Justin Bilyj
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    You mustve saw the same webinar I did. How far back did Kado go for the 3 year looking better than 2 year? I dont think agents/marketers go back far enough for back-testing these strategies.

    If an fmo tells me how great something woulda done 15 or 20 years ago, makes me skeptical...
     
  8. SanDiego619
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    Annexus presents all their webinars the same way honestly.
     
  9. scagnt83
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    I have ran models going back to the 1970s and the 2 year still performed just as good or better than the 1 year options.
     
    scagnt83, Sep 18, 2015
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  10. DWPCL
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    It was in person not a webinar. Kado was actually my favorite part about the Annexus conference.

    Full disclosure though, one of the main reasons I like the BCA over newheights is because BCA has 2 year ptp.
     
    DWPCL, Sep 18, 2015
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