- 428
you should really only sell an FIA with one moving part as this is client friendly and there eyes don't glass over??
A Perfect "Trade In" From An Old Annuity
- Thread starter CDA of America
- Start date
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- annuity
- 7,790
- 428
good thing I don't get paid for my spelling ability
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- 924
Probably no such thing as a one moving part annuity. Maybe a MYGA, but I doubt that as well depending on how you define moving part.
Ichiban
Expert
- 62
I think most people define one moving part as only one of the following can change Cap, Particpation Rate or Spread. Most will have as an example 100% Particpation Rate, No Spread and a Cap that won't be lower than X%. The cap can change but the other factors can't. A few products like the one listed above can change 2 things meaning both your particiaption rate and cap can increase or decrease at any renewal (Not that I have ever seen any increase off hand...). So you could have say 30% Participation and a 6% cap as an example.
- 924
I think there are many more moving parts, at least the way I define them. Let's not forget market value adjustments (MVA).
A moving part is any part of an annuity contract that is hard to follow and can be used by the company to screw the customer if the part is not fully understood going in. "Sorry mate, your dad turned on income under our rider and that eliminated the death benefit" sort of thing. Or, "Sorry, your 20% bonus is over in this bucket and that is not the bucket you chose to take your money out of." Or, "Sorry, our contract does not exclude your required minimum distribution from our definition of 'penalty free withdrawal' so you will lose your guaranteed minimum return that we talked about as being party of your income rider."
You can also get into "fine print" issues that are moving parts like minimum contract values, death benefit provisions, contract guarantees in general, ways to access money (liquidity), under what circumstances a bonus is vested (up front, back end, actually vested for real 1 point per year like Allianz does in one product), --anyway, these (and many, many more) are moving parts as far as I am concerned.
A moving part is any part of an annuity contract that is hard to follow and can be used by the company to screw the customer if the part is not fully understood going in. "Sorry mate, your dad turned on income under our rider and that eliminated the death benefit" sort of thing. Or, "Sorry, your 20% bonus is over in this bucket and that is not the bucket you chose to take your money out of." Or, "Sorry, our contract does not exclude your required minimum distribution from our definition of 'penalty free withdrawal' so you will lose your guaranteed minimum return that we talked about as being party of your income rider."
You can also get into "fine print" issues that are moving parts like minimum contract values, death benefit provisions, contract guarantees in general, ways to access money (liquidity), under what circumstances a bonus is vested (up front, back end, actually vested for real 1 point per year like Allianz does in one product), --anyway, these (and many, many more) are moving parts as far as I am concerned.
- 11,457
Just so you don't dig up any more 8 year old threads with this...most of the threads on this forum are going to be about fixed and fixed index annuities, neither of which have any inherent expenses.
- 11,457
